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What happened

Shares of Broadcom (NASDAQ: AVGO), the semiconductor company known for making chips for networking components, broadband, wireless, infrastructure, and data centers, were moving higher today after it got a bullish analyst note ahead of its second-quarter earnings report due on Thursday.

The stock also seemed to benefit from broader tailwinds in tech and AI stocks today.

The stock closed up 3.4% while the Nasdaq gained 1.7%.

So what

The only company-specific data point that seemed to be driving Broadcom stock higher was a positive note from Piper Sandler.

The research firm raised its price on Broadcom from $830 to $925 and maintained an overweight rating on the stock.

Piper is expecting a “beat and raise” quarter from Broadcom, citing positive momentum around its data center products. It also thinks the chipmaker can outperform for the current quarter and expects increasing smartphone demand to drive guidance.

Separately, tech stocks and AI stocks were rallying in general as a soft consumer sentiment report lifted growth stocks, and Alphabet‘s Google also announced several moves, including a $30/month enterprise AI tier and partnerships with General Motors and Nvidia.

Nvidia’s earnings report last week signaled that demand for AI chips remains massive, a positive sign for Broadcom as well.

Now what

Broadcom will report second-quarter earnings on Thursday afternoon, and analysts are expecting modest growth as the semiconductor sector has been weak in spite of excitement about AI. The consensus calls for revenue to grow 4.7% to $8.86 billion and for earnings per share to tick up from $9.73 to $10.42.

The good news for investors is that those modest expectations could make it easy for the company to deliver a beat-and-raise report as Piper Sandler predicted. We’ll learn more after the earnings report comes out.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool recommends Broadcom and General Motors and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.

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