Broadcom named top pick ahead of Sept. 2 Q3 earnings

BakerAvenue chief strategist King Lip identified Broadcom Inc. as a “top pick” ahead of the chipmaker’s third-quarter earnings scheduled for Sept. 2 after the market close. Analysts expect Broadcom to report about $29.43 billion in revenue and $3.24 in EPS for the quarter, figures that imply roughly 84.5% revenue growth and 91.7% earnings growth year over year. Broadcom shares are down more than 25% from their year-to-date high and trade below several major moving averages.

Lip said he sees AI infrastructure spending shifting from early-stage model training to large-scale inference, where chips run repeated, efficient processing for live applications. He summarized the change as a move from “show me the model” to “show me the money,” arguing that inference workloads favor efficient, specialized devices over general-purpose processors.

Lip pointed to Broadcom’s business in custom application-specific integrated circuits and high-efficiency networking silicon as a match for that inference phase. He contrasted Broadcom’s position with GPU-focused firms, noting that GPU leaders remain strong in training while Broadcom can address high-volume, repetitive workloads without requiring GPU share losses.

The stock offers a dividend yield of about 0.71%, a factor Lip noted for long-term holders. He also flagged technical weakness in the shares, with prices below key moving averages, which he said reflects short-term selling pressure ahead of the report.

Lip listed several risks that could affect near-term results: rising interest rates, questions about the quality and sustainability of AI-related revenue, physical execution bottlenecks in chip production, and competition from emerging rivals in the custom chip space. He also pointed to non-technical limits on data center expansion, including local power grid constraints and community construction moratoria, which could alter demand for both general-purpose GPUs and custom inference hardware.

Wall Street analysts maintain a consensus Buy rating on Broadcom, with a mean price target near $534. Broadcom’s Sept. 2 earnings release will provide the first public data point on whether revenue and margins reflect the shift Lip describes and the company’s exposure to inference-related demand.