AVGO TPUs, Cloud Face Earnings Test in GOOGL, Anthropic Partnerships

**SPEAKER_1** (0:01)
All right, let's take a look here. We're looking at Broadcom, right now down about half a percent. We want to preview today's earnings report for our tech spotlight. There he is, Angelo Zino, Senior Equity Analyst at CFRA Research.
So glad you are with us. Broadcom, you know, we always talked about the Mag-7. This was like the honorary Mag-8. What do you think here? What are you waiting on? What do you need to see from today's earnings report? Let's talk about that.

**Angelo Zino** (0:26)
Yeah, so Nicole, thanks for having me. I'd say Broadcom expects some good results from them. I mean, you're looking at a number where revenue is going to grow north of 80% this quarter, year over year. Expect kind of ongoing strength here going into the October quarter. And I do think to an extent for Broadcom, the bar has been raised. Obviously, you had NVIDIA, which just gave an unbelievable guidance and actually gave some visibility for calendar 27 So to some extent, there are going to be expectations here on this call for Broadcom to really provide more to the investment community. Whether or not Broadcom provides some additional detail, I think will essentially make or break or dictate how the stock performs after the result. But ultimately, listen, the fundamentals remain very strong when you look at their custom Silicon pipeline looking ahead here over the next couple of years. You would expect that overall, the trajectory looks pretty good.
In terms of maybe some of the questions that might be out there, or where investors are lingering, I'm hoping to get more answers on. I would say we want more clarity in terms of that TPU exposure from Google's business. Obviously, Google is broadening out their supply chain.
We want to make sure that Broadcom continues to be well entrenched in there, which we think they are. Then anything that they have to say in terms of finance and commitments and what have you is probably another area of concern out there for investors, just given the rising interest rate environment and what have you.

**SPEAKER_1** (2:08)
Yeah, because you talked about Google now and there were questions whether or not the CEO, Hockattan, would actually talk about AI customers, AI competition is something that was also mentioned for, in fact, the Google's Custom Chip business. You have these partnerships that you noted here in your notes, talking about those partnerships at the same time, competition. What do you think people may be listening for?

**Angelo Zino** (2:36)
Yeah, I mean, again, I think the most important aspect of this call, it's not going to be the potential beat and raise, because I think that's almost expected at this point in time. And I think it's also important as a reminder for everybody that when you actually look at the peak of the semi-trade, it actually happened when Broadcom reported its last earnings results, right? That was kind of a time where Hockattan essentially came out there and delivered pretty good results and good guidance, but he didn't deliver that big beat and raise type quarter that maybe, you know, people had been accustomed to seeing. So that was really kind of the peak of the trade at this point in time. As you kind of go into this earnings call, obviously, the bar to some extent is lower in the sense that the stock just hasn't been working. The multiple has compressed significantly. And as you kind of look again, maybe on this call, what people do want to hear, I'd say, as far as that pipeline is concerned, whether it be the Anthropics, the Googles of the world, they do want to make sure that those existing clients are going to continue to spend more with them. I mean, you're looking at about 50, 55 billion here this fiscal year.
They're guided toward north of 100 billion next year, but the street's probably closer to 120 billion. So they're going to want to see something maybe closer to 150 billion or something along those lines. So we kind of want to hear the clarity on that side. And as far as competition is concerned, yes, the competitive landscape is getting more fierce on the custom silicon side, but also important to note that the overall custom silicon market is growing, we think is going to grow much bigger and faster than the broader GPU market and overall accelerator space over the next couple of years.

**SPEAKER_1** (4:15)
And there's a lot of obviously when we talk about Hawktan and a lot of people really believing in this CEO, but I think about the long term, whether or not the company can really now move and shift from these large models to having these AI applications at scale. We are looking way ahead. I see some of these projections into the year 2030 that when you think about what does it do going forward, it also maybe faces some risks. You list some risks here too. Tell us about that.