Broadcom (AVGO) reported EPS of $1.42 for the latest quarter, beating estimates of $1.39. The company has beat earnings expectations for the last 8 quarters.

Earnings results came in 2.2% above street expectations, which is above the 8 quarter average (orange line) of 1.9%, and greater than last quarters 1.6% earnings beat. The beat rate has increased for the 2nd straight quarter.

AVGO earnings grew 28% for the quarter, the highest growth rate in the last 8 quarters, and well above the 8 quarter average of 14% (orange line).

Sales came in at $14.068 billion for the quarter, which is slightly below street estimates of $14.054. The first sales miss in the last 8 quarters.

Sales came in -0.1% below street estimates .

However the sales growth rate continues to heat up, coming in at +51%, the highest growth rate in the last 8 quarters. Marking the 4th straight quarter of sales growth increases.

Broadcom has been one of the big benefactors of the AI revolution. The company has seen its market cap go from around $200 billion, to almost $1 trillion. Cracking into the top 10 biggest companies in the world.

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The company issued forward guidance on earnings and revenue that were above street expectations. Currently the market is expecting about 29% growth over the next 4 quarters. The stock has gapped up about 20% this morning, breaking out above prior resistance around the $185 level that the stock had been banging its head against for the last 6 months.

The forward PE on the stock is around 35x after todays big price increase. With a dividend yield of about 1%. The forward PE is right in line with most of the “mag 7” stocks, and although it trades at a significant premium to the market average, its growth rate is about 3x the market average.

A lot to like about this company, with a sales and growth rate that is well above average and heating up. Valuation isn’t ridiculous given the growth rate either. It’s an exciting time to be an investor, but its hard to put new money to work at current price levels since it offers little margin of safety in the short term.

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