Market Minute: Can Broadcom 2Q Earnings Send Shares Higher?
Shares of Broadcom Inc (AVGO), which reports fiscal 2Q earnings Wednesday after the close, are up roughly 39% this year as the AI revolution and data center buildout take root.
The semiconductors and infrastructure software solution giant’s market capitalization has surged past $2.2T with the stock’s ferocious 66% rally off the March 30 low of $289.96. From an earnings perspective, GAAP earnings have exceeded analyst expectations in the past four quarters, with the earnings-per-share-beat in fiscal 2Q25 being the smallest at one penny.
The consensus among analysts calls for Broadcom earnings of $2.40 per share, an increase of about 52%, on revenue of $22.04B, an increase of nearly 47%. The stock is trading at roughly 40 times earnings, while peer Marvell Technology (MRVL) is trading at 57x.
The consensus calls for 76% growth in overall semiconductor revenue to $14.8B compared to 2Q25. The Street expects revenue to show strong demand for Broadcom’s custom processing units and accelerators (XPUs) used in AI processes. Broadcom Application-Specific Integrated Circuits (ASICs) can be customized to accelerate AI systems, with energy efficiency, giving them appeal relative to rival graphics processing units (GPUs). Broadcom’s Infrastructure Software business is expected to show growth from subscriptions and cloud advancements tied to VMware. All eyes will be on gross margins.
What might Broadcom’s second-quarter earnings produce? It’s been a good week for companies like Broadcom entrenched in the AI buildout. Alphabet (GOOGL) Monday committed to funding expanded AI infrastructure with a plan to raise $80B for AI goals including a $10B private placement with Berkshire Hathaway (BRK/B). Alphabet’s stock fell 3.86% Tuesday, but Broadcom shares rose 4% along with semiconductor peers including Marvell, which jumped 32%, and Taiwan Semiconductor (TSM), up more than 2%. The Philadelphia Semiconductor Index (SOX) was up 5.87%.
From a technical perspective, there is support for the Broadcom stock trajectory. Its move higher was most recently punctuated by an upside breakout above an already-bullish upward channel shape. The lower boundary of the channel began around the April 15 lows with a duplicate parallel line corresponding with highs until Monday’s upside push closed above that upper boundary near about $455. This upper boundary stands out as supportive not only because old resistance can become new support down the road, but also because it roughly aligns with the 5-day weekly Exponential Moving Average.
Momentum also increased heading into earnings, as the Relative Strength Index (RSI) broke above the 70 line that demarcates the overbought area. This breakout, which is often regarded as a sign of strength in a trending market, is counter to the typical behavior of slowing momentum before earnings.
Upside resistance can be challenging to project when stocks are making new all-time highs, but several supportive areas stand out. First, a three-month Volume Profile study focusing on the recent upswing shows very heavy trading activity centered around the 415 to 430 area and matching up with sideways price action from late April to late May. This price area roughly coincides with old highs from Dec. 10 near $415, which also lines up with the lower edge of the potential expected move range for the Jun. 18 monthly options expiration. This range comes in at about +/-61 (12.6%), which equates to a lower boundary of right near that same $415 level.
Rick Ducat contributed to this article.
