According to CICC's research report, Broadcom's (AVGO.US) Q4 of fiscal year 2024 revenue reached $12.49 billion, a YoY growth of 43% and a QoQ growth of 4.4%. The net profit under non-US GAAP increased by 6.2% YoY to $5.39 billion. The revenue of artificial intelligence (AI) related to semiconductors business during the period exceeded expectations, reaching $3.1 billion, an increase of approximately 2.8 times YoY, and a growth of 35% QoQ, accounting for about 43% of the semiconductor business revenue.

The bank pointed out that VMware and AI business were the main drivers of revenue growth during the period, while corporate and telecommunications business offset some of the growth due to cyclical weakness. The overall quarterly revenue exceeded the bank's and market expectations slightly. The management also raised the revenue target for fiscal year 2024 to $51 billion and adjusted the EBITDA profit margin target to 61% after adjustment. Considering the upward revenue guidance and the better-than-expected progress of VMware integration, CICC also raised Broadcom's non-US GAAP EPS forecasts for fiscal years 2024 and 2025 by 4.1% and 14.3% respectively to $47.36 and $59.1, maintaining a neutral rating.

CICC stated that Broadcom's core position in AI was proven, and based on the latest valuation expectations, they raised the target price to $1,560, corresponding to a forecasted PE of approximately 33 times and 27 times for fiscal years 2024 and 2025, respectively.