In This Article:
On Jan 12, Semiconductor and infrastructure software solutions provider Broadcom (AVGO, Financial) issued $3 million in senior notes. The offering comprises three tranches: $800M of 5.050% notes due 2030, $1.1bn of 5.200% notes due 2032, and $1.1bn of 4.800% notes due 2028. Broadcom's notes are unsecured, on a paper with Broadcom's then outstanding unsecured debt, and not contingent upon the guarantee by Broadcom's subsidiaries.
The company stated that the money would be used for general corporate purposes, including debt repayment. Indeed, AI-related sales more than tripled to $12.2 billion in fiscal 2024 and 51 billion-plus in sales for the entire year as Broadcom moved.
Broadcom reported revenues of $14.1 billion and earnings per share of $1.42, ahead of market expectations, in its fiscal fourth quarter 2024 earnings report. Revenues for the first quarter of fiscal year 2025 should be $14.6 billion, and the EBITDA margin should be just about 66%.
Analysts have responded well to Broadcom's positioning in the AI space and positioning itself as strategically as it has. UBS steps up Broadcom shares price target and expects the company's AI revenue streams to be promising. For its part, Bernstein SocGen Group is also staying "Outperform" with projections that AI revenue will run from $60 billion to $90 billion by 2027. Goldman Sachs strikes back resolutely, slapping a 'Buy' rating on Broadcom and its first thoughts on why the stock is once again bubbling up.
This article first appeared on GuruFocus.