Image Source: Unsplash
 

Broadcom (AVGO - Free Report) ) and Dell Technologies (DELL - Free Report) ) are two notable technology companies that were able to beat earnings expectations last week. Both companies are also trending names in the landscape of artificial intelligence which has continued to gain steam.

Let’s see if now is a good time to buy Broadcom or Dell stock after their favorable quarterly results last Thursday.
 

Broadcom Q2 Review

Broadcom is starting to be brought up in artificial intelligence conversations as Wall Street believes the chip giant would likely be the next semiconductor company to benefit from the increasing demand for generative AI and infrastructure-related capacity.

This comes after Nvidia (NVDA - Free Report) ) was able to post strong quarterly results in late May driven by high demand for its AI chips. Like Nvidia, Broadcom was able to beat its top and bottom expectations with its fiscal second-quarter earnings coming in 2% above EPS expectations at $10.32 per share.

Quarterly earnings were also up 14% from the prior-year quarter. On the top line, sales slightly topped estimates at $8.73 billion, up 8% from a year ago.

Image Source: Zacks Investment Research

Broadcom stated that AI revenue accounted for 15% of its semiconductor business. The company expects this growth to continue with Broadcom providing Ethernet switches and fabric to foster AI networks.

Based on Zacks estimates, Broadcom’s earnings are now forecasted to be up 9% in FY23 and rise another 5% in FY24 at $43.48 per share. Total sales are expected to rise 6% this year and edge up another 4% in FY24 to $36.84 billion.
 

Dell Q1 Review

Dell is another tech company receiving considerable attention as the information technology solutions provider is partnered with Nvidia on their generative AI venture Project Helix.

The collaborators are assisting businesses with their use of generative AI to provide better customer service, market intelligence, and enterprise research among other capabilities.

Dell blasted its fiscal first-quarter EPS estimates by 50% with earnings at $1.31 per share compared to expectations of $0.87 a share. However, this was still down -29% from the prior-year quarter as Dell stated its operating environment remains challenging with customers still cautious in their IT spending. Still, sales came in 4% higher than expected at $20.92 billion but declined -20% year over year.

Image Source: Zacks Investment Research

Already following a tougher to-compete-against year, Dell’s annual earnings are now expected to drop -30% in its current fiscal 2024 at $5.28 per share compared to EPS of $7.61 in FY23. With that being said, earnings are projected to rebound and rise 16% in FY25 at $6.15 per share. Total sales are now forecasted to decline by -15% in FY24 and then stabilize and rise 5% in FY25 to $90.81 billion.

Furthermore, optimism towards Dell’s AI possibilities has remained high with the company creating a portfolio of Validated Designs for AI to simplify the IT infrastructure and provide faster and deeper insights.
 

Bottom Line

At the moment Dell and Broadcom stock both land a Zacks Rank #3 (Hold). With Broadcom stock already rising 43% this year and Dell stock up 13% there could be better buying opportunities ahead but holding shares of both AI players could still be rewarding.

More By This Author:

These Stocks Led The End Of The Week Rally - Is It Time To Buy?
Campbell Soup Expected To Beat Earnings Estimates: Can The Stock Move Higher?
3 Intriguing Stocks To Watch As Earnings Approach