Oppenheimer Anticipates Broadcom to Beat Q2 Estimates and Raise Guidance
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Broadcom reports fiscal Q2 on June 3; Oppenheimer expects a beat-and-raise quarter, with AI-related sales up ~30% sequentially and chip capacity locked through 2028.
What is this note actually saying?
Oppenheimer analyst Rick Schafer predicts Broadcom will deliver a beat-and-raise quarter.
Street consensus puts fiscal Q2 revenue at $22.11 billion and EPS at $2.40.
Schafer keeps a Buy rating with a $450 price target. This means → he sees material upside from the current level.
Why is the AI business growing this fast?
Broadcom's AI-related sales grew ~30% sequentially in fiscal Q2, matching the prior quarter's pace.
The core products are custom ASICs — chips designed to each client's specifications — and networking gear. By scale, Broadcom trails only Nvidia.
In plain terms = tech giants don't want to depend on Nvidia alone, and Broadcom is their second option.
Why does the customer list matter?
Broadcom's chip capacity is locked through 2028. Key customers include Google, Meta, TikTok US, Anthropic, and OpenAI.
Anthropic plans to deploy 1 GW of compute this year, spending $15–20 billion, and scale to 3 GW next year.
OpenAI targets 1 GW by fiscal 2027; Meta's in-house MTIA chip roadmap is also on track.
This reflects a compute arms race among tech giants that is funneling orders directly to Broadcom.
Can the $57 billion AI revenue forecast go higher?
Schafer's prior model for fiscal 2026 AI revenue stood at $57 billion.
As the incremental orders above land, that figure has further upside.
This means → $57 billion is a floor estimate, not a ceiling.
How profitable is Broadcom, really?
Gross margin 78%, operating margin 66%, free-cash-flow margin 42%.
Put simply = for every $100 in revenue, $42 turns into cash the company can freely deploy.
High-visibility order flow paired with high margins — that is the core logic behind the bullish call.
Content is for reference only, not financial advice.