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Broadcom (AVGO) Shares Edge Higher on Q2 Results – Here’s Why

Simon Mugo trader
Updated 2 Jun 2023

The Broadcom Inc (NASDAQ: AVGO) share price edged 0.26% higher after releasing the financial results for its second quarter ended April 30, 2023. The company generated revenues worth $8.73 billion, representing a 7.8% improvement from last year’s figures.


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The company’s revenues beat analysts' estimates by about $20 million, with semiconductor solutions making up the giant’s share of the revenues at $6.81 billion, about 78% of its total revenues. In addition, the firm generated earnings per share of $10.32, beating analysts' estimates by $0.18.

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Broadcom’s forecast for the third quarter shows that it expects to generate revenues worth $8.85 billion, much higher than analysts' consensus estimates of $8.71 billion. In addition, the company expects its adjusted pretax earnings to be at least 65% of its revenues. 

During Q2 2023, the company generated $4.502 billion in cash from operations and spent just $122 million on capital expenditures. Furthermore, the company spent $3.42 billion on share repurchases and eliminations. 

The payments comprised $2,806 million spent repurchasing 4.6 million shares and $614 million in withholding tax payments for the net settled equity awards vested during the quarter (representing about 1.0 million shares withheld). 

Broadcom remains a significant player within the global semiconductor industry as it also makes AI chips, and its share price benefitted from the recent rally in Nvidia’s share price. The company plans to leverage the soaring demand for AI chips to maintain the upward momentum in its revenues, margins and profits. 

Hock Tan, President and CEO of Broadcom Inc, said: “Broadcom's second-quarter results were driven by demand for next-generation technologies from hyper-scale, while enterprise and service providers continued to sustain. Our third quarter outlook projects year-over-year growth, reflecting continued leadership in networking as we support a measured ramp into large-scale AI networks.”

Kirsten Spears, CFO of Broadcom Inc., said: “Consolidated revenue grew 8% year-over-year to $8.7 billion, and adjusted EBITDA margin increased year-over-year to 65%. We generated $4.4 billion in free cash flow and expect cash flows to remain strong for Q3.”

*This is not investment advice. 

Broadcom (AVGO) share price. 

The Broadcom (AVGO) share price was up 0.26% at $792.00 from Thursday’s closing price of $789.95.


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Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading