Published - November 9, 2022 @ 11:05 AM (EET)

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Chipmaker Broadcom Inc. (NASDAQ:AVGO) reported solid fiscal fourth-quarter earnings, with EPS of $10.45 coming in better than Wall Street estimates of $10.28, indicating that demand from the data center industry and corporate customers remain strong.

Revenue came in at $8.93 billion, while full-year revenue grew 21% year-over-year to a record $33.2 billion.

In a statement Thursday, Broadcom said it expects revenue in the fiscal first quarter of 2023 to be $8.9 billion, better than the projected $8.79 billion.

"This growth was driven by our strong partnerships with customers and accelerated adoption of our next-generation technologies," Chief Executive Hock Tan said.

Though Broadcom shows no concerns over weak consumer spending on electronics and believes spending on computing infrastructure remains strong, the company wouldn't give any guidance on its performance for the current fiscal year.

Chief Executive Hock Tan said in the call with analysts, "We continue to experience sustained demand in most of our end markets," adding that he anticipated more of the same in the chip and software maker's current quarter.

WHAT ELSE IS HAPPENING

By acquiring security and mainframe capabilities, the California-based Broadcom also branched out into enterprise software and is trying to extend the diversification with a $61 billion purchase of VMware Inc.

The company said that the transaction, announced in May, is making progress with regulators and is still likely to close in fiscal 2023.

Elsewhere, Broadcom expects its wireless unit to grow by low-single-digit percentages and predicts the chip market will decelerate to historical growth rates of about 5% or less.

NOW WHAT

Following the report, shares rose as much as 3.6% to $550 in late trading. 

Since the beginning of the year, Broadcom has lost roughly 22.1% versus the S&P 500's decline of 17.5%.  Still, the performance is significantly better than most chip peers this year.

Based on four analyst ratings covered by TipRanks, Broadcom remains a Strong Buy with an average price target of $678.75, which indicates an upside potential of 27.81%.

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