Broadcom’s CEO & CFO Meeting Takeaways

Deutsche Bank analysts shared their views on Broadcom Inc. (NASDAQ:AVGO) following their meeting with the company’s CEO and CFO, noting that management expects demand to continue to outpace supply as backlog continues to increase ($29 billion in Q2 vs. $25 billion in Q1).

Within the company’s semiconductor business, which represents approximately 77% of total revenue, demand within the Networking and Server Storage Connectivity segments remains particularly strong with no signs of slowing, while a few customers in the Broadband and Industrial segment have started to take a more thoughtful and judicious approach to bookings.

Beyond Semiconductors, management believes that the mission-critical aspect of its software assets makes its Infrastructure Software segment (approximately 23% of total revenues) much more resilient against the macroeconomic recession, as the company’s software services are a critical part of the core and non-discretionary portion of mid-to-large enterprises' IT budgets.

Overall, the analysts believe the company’s scale along with its competitive and leadership position in a wide array of products across end-markets remains of significant importance, especially during an uncertain and volatile macro environment.