This article first appeared on GuruFocus.
Broadcom (NASDAQ:AVGO) is heading into its fiscal third-quarter earnings report with a fresh vote of confidence from Cathie Wood's ARK Invest, which added to the semiconductor company's position ahead of the results.
ARK bought 55,131 Broadcom shares worth about $20.5 million across three ETFs. The purchase follows another Broadcom addition earlier in the week and comes shortly before the company's Sept. 2 earnings release.
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Broadcom's previous quarter showed the scale of its AI exposure. Revenue reached $22.19 billion, up 48% year over year, while AI semiconductor revenue climbed 143% to $10.8 billion. Management has projected third-quarter revenue of about $29.4 billion, with AI semiconductor sales expected at $16 billion.
Investors will therefore be watching whether custom accelerators and AI networking can deliver the expected step-up in sales. The company has also been expanding its AI processor relationships, including work with OpenAI on an LLM-optimized processor.
ARK's purchase raises the profile of Broadcom's upcoming report, although the disclosure provides no explanation for the trade.
Earnings guidance and AI semiconductor growth could determine whether Broadcom can sustain investor interest around its AI opportunity.