Thursday, August 16, 2023

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Broadcom Inc. (AVGO), Pfizer Inc. (PFE) and Advanced Micro Devices, Inc. (AMD). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Broadcom shares have outperformed the Zacks Electronics - Semiconductors industry (+55.7% vs. +48.1%) as well as the broader S&P 500 index (+55.7% vs. +4.2%) over the past year. The company is benefiting from strong deployment of generative AI by hyperscalers, service providers and enterprises.

It expects generative AI to contribute more than 25% of semiconductor revenues in fiscal 2024 compared with an estimated 15% in fiscal 2023 and roughly 10% in fiscal 2022. Strong demand for Tomahawk 5, Jericho, 10-gigabit PON and DOCSIS 3.1 with embedded Wi-Fi 6 and 6E aids Broadcom. Expanding portfolio with the launch of second-gen Wi-Fi 7 wireless connectivity chip is a catalyst.

Broadcom expects networking revenues to grow nearly 20% year over year in the fiscal third quarter. Server storage connectivity revenues are expected to be up low single digits year over year. Broadband revenues growth is expected in moderate to low-single-digit percent year over year.

(You can read the full research report on Broadcom here >>>)

Shares of Pfizer have underperformed the Zacks Large Cap Pharmaceuticals industry over the year-to-date period (-28.9% vs. +10.0%). The company’s top line is declining in 2023 due to steep declines in revenues from its COVID-19 products, Comirnaty vaccine and Paxlovid oral pill, on lower demand. Concerns remain about its long-term growth drivers beyond its COVID products due to competitive pressure.

Nevertheless, Pfizer boasts a diversified portfolio of innovative drugs and vaccines, including Ibrance and Prevnar. Pfizer is witnessing solid pipeline progress and is launching some key non-COVID products in 2023, which can drive long-term sales and profit growth.

Huge profits from its COVID products strengthened its cash position which is used being to make acquisitions, increase dividends, buy back shares and reduce debt.

(You can read the full research report on Pfizer here >>>)

AMD shares have modestly lagged the Zacks Electronics - Semiconductors industry this year (+66.2% vs. +72.2%), but they have been stellar performers otherwise. The company’s growing adoption of fourth-generation EPYC by the lights up prospects. Genoa adoption was strong in the reported quarter with deployments from the likes of Microsoft, AWS, Alibaba and Oracle.

Availability of Bergamo is crucial as a number of server providers like Dell, HPE, Lenovo, and Supermicro are set to launch their new Bergamo-based platforms in the third-quarter. AMD continues to benefit from acquisitions including Xilinx and Pensando, which has diversified its business.

However, stiff competition remains a concern. AMD’s second-quarter 2023 results suffered from weak data center revenues. The year-over-year decline was primarily attributed to lower third-generation EPYC processor sales due to soft enterprise demand and an elevated level of inventory at some customers.

(You can read the full research report on AMD here >>>)

Other noteworthy reports we are featuring today include The Charles Schwab Corporation (SCHW), Canadian National Railway Company (CNI) and D.R. Horton, Inc. (DHI).

Director of Research

Sheraz Mian

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>