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Broadcom (AVGO) Plans to Invest in EU Chip Project in Spain
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Broadcom (AVGO - Free Report) recently proposed an investment in a EU-funded program to create a semiconductor industry in Spain.
This is part of the EU's semiconductor strategy to boost its own chip industry and reduce reliance on U.S. and Asian suppliers, amid a global chip shortage and supply chain disruptions.
The project concerning Broadcom could cost $1 billion and would involve creating large-scale back-end semiconductors facilities that are rare in Europe. Spain plans to use up to $13 billion from the EU's pandemic relief funds to support this development.
Before Broadcom, the Spanish Government shared Cisco Systems’ (CSCO - Free Report) plans to open a new chip design centre in the northeastern city of Barcelona.
The project represents Cisco’s long-term commitment to the digitization of Spain. Cisco’s innovation and technology leadership aims to grow Europe’s semiconductor ecosystem, making it competitive and resilient.
Strong Product Portfolio to Aid Broadcom’s Prospects
Per an article by Gartner, the global semiconductor industry is expected to decline by 11.2% in 2023, due to softness in end-market demand, oversupply of chips and price erosion.
Stocks in the industry and the sector surged 46.3% and 35.6% year to date, respectively.
The uptick can be attributed to its diverse portfolio offering of semiconductors and infrastructure software solutions. The strong deployment of generative AI by hyperscalers, service providers and enterprises have been major tailwinds.
In June 2023, Broadcom announced the availability of its second-generation Wi-Fi 7 chipset solutions for various Wi-Fi devices and FBAR integrated front end module (FiFEM) devices with filter integration optimized for Wi-Fi 7 access points.
In April 2023, Broadcom introduced Jericho3-AI, a fabric that enhances the performance of artificial intelligence (AI) networks. It offers perfect load balancing, congestion-free operation and ultra-high radix.
Continued innovation and enhancements in its portfolio have been noteworthy. The pending acquisition of VMware is expected to accelerate innovation and expand choice by addressing complex technology challenges in this multi-cloud era.
The acquisition of VMware has received legal merger clearance in Australia, Brazil, Canada, South Africa and Taiwan and foreign investment control clearance in all necessary jurisdictions. The deal is still expected to close in Broadcom’s fiscal 2023.
In third-quarter fiscal 2023, Broadcom expects revenues of $8.85 billion, up 4.6% year over year. Semiconductor revenue growth is expected in the mid-single-digit percentage range on a year-over-year basis.
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $8.86 billion, indicating a 4.64% growth from the year-ago quarter’s reported figure.
The Zacks Consensus estimate for earnings increased 0.4% to $10.42 per share in the past 30 days.
Zacks Rank & Stock to Consider
Currently, Broadcom carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Allegro’s first-quarter fiscal 2024 revenues is pegged at $275 million, indicating a year-over-year rise of 26.29%. Earnings estimates have remained unchanged at 37 cents per share in the past 30 days, indicating a 54.17% year-over-year growth.
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Broadcom (AVGO) Plans to Invest in EU Chip Project in Spain
Broadcom (AVGO - Free Report) recently proposed an investment in a EU-funded program to create a semiconductor industry in Spain.
This is part of the EU's semiconductor strategy to boost its own chip industry and reduce reliance on U.S. and Asian suppliers, amid a global chip shortage and supply chain disruptions.
The project concerning Broadcom could cost $1 billion and would involve creating large-scale back-end semiconductors facilities that are rare in Europe. Spain plans to use up to $13 billion from the EU's pandemic relief funds to support this development.
Before Broadcom, the Spanish Government shared Cisco Systems’ (CSCO - Free Report) plans to open a new chip design centre in the northeastern city of Barcelona.
Broadcom Inc. Price and Consensus
Broadcom Inc. price-consensus-chart | Broadcom Inc. Quote
The project represents Cisco’s long-term commitment to the digitization of Spain. Cisco’s innovation and technology leadership aims to grow Europe’s semiconductor ecosystem, making it competitive and resilient.
Strong Product Portfolio to Aid Broadcom’s Prospects
Per an article by Gartner, the global semiconductor industry is expected to decline by 11.2% in 2023, due to softness in end-market demand, oversupply of chips and price erosion.
However, shares of Broadcom increased 51.5% year to date, outperforming the Zacks Electronics-Semiconductors industry and the Zacks Computer and Technology sector.
Stocks in the industry and the sector surged 46.3% and 35.6% year to date, respectively.
The uptick can be attributed to its diverse portfolio offering of semiconductors and infrastructure software solutions. The strong deployment of generative AI by hyperscalers, service providers and enterprises have been major tailwinds.
In June 2023, Broadcom announced the availability of its second-generation Wi-Fi 7 chipset solutions for various Wi-Fi devices and FBAR integrated front end module (FiFEM) devices with filter integration optimized for Wi-Fi 7 access points.
In April 2023, Broadcom introduced Jericho3-AI, a fabric that enhances the performance of artificial intelligence (AI) networks. It offers perfect load balancing, congestion-free operation and ultra-high radix.
Continued innovation and enhancements in its portfolio have been noteworthy. The pending acquisition of VMware is expected to accelerate innovation and expand choice by addressing complex technology challenges in this multi-cloud era.
The acquisition of VMware has received legal merger clearance in Australia, Brazil, Canada, South Africa and Taiwan and foreign investment control clearance in all necessary jurisdictions. The deal is still expected to close in Broadcom’s fiscal 2023.
In third-quarter fiscal 2023, Broadcom expects revenues of $8.85 billion, up 4.6% year over year. Semiconductor revenue growth is expected in the mid-single-digit percentage range on a year-over-year basis.
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $8.86 billion, indicating a 4.64% growth from the year-ago quarter’s reported figure.
The Zacks Consensus estimate for earnings increased 0.4% to $10.42 per share in the past 30 days.
Zacks Rank & Stock to Consider
Currently, Broadcom carries a Zacks Rank #3 (Hold).
A better-ranked stock worth considering in the same industry is Allegro MicroSystems (ALGM - Free Report) , sporting a Zacks Rank #1 (Strong Buy). Shares of ALGM have surged 46.5% year to date. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Allegro’s first-quarter fiscal 2024 revenues is pegged at $275 million, indicating a year-over-year rise of 26.29%. Earnings estimates have remained unchanged at 37 cents per share in the past 30 days, indicating a 54.17% year-over-year growth.