Breaking: AVGO Rallies After Beating Q1 Estimates

After yesterday’s "Trump Bump," today is a much quieter day on Wall Street. All three of the benchmark indices are slightly in the red, with basic materials, energy, financials and industrials stocks leading the market lower.

However, within the sea of red, there is a notable exception. Avago Technologies (AVGO) wasn’t impacted at all by the market’s hangover. Instead, shares of AVGO are rising after the chipmaker beat sales and earnings expectations for the fiscal first quarter.

For the first quarter, Net revenue was $4.14 billion, a modest improvement over a year ago. Analysts were calling for $4.08 billion, so Broadcom posted a 1.5% sales surprise. Broadcom also reported net income of $252 million, or $0.57 per share. This represented a major turnaround from a year ago, when Broadcom posted a net loss of $668 million, or a loss of $1.59 per share. Excluding special items, adjusted EPS was $3.63, which beat the $3.46 consensus EPS estimate by 5%.

Looking ahead to the second quarter, Broadcom is targeting revenue between $4.15 billion and $5.17 billion. This is well above the Street view of $3.9 billion. AVGO shares rallied after this report was posted. Avago’s performance today proves that amidst general uncertainty, fundamental strength is king. I recommend AVGO as an B-rated Buy.

Sincerely,

Louis Navellier

Louis Navellier

P.S. If you’d like more information on AVGO, including my current price limit for the stock, you can access it through a risk-free trial of Blue Chip Growth.

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