TMTB Morning Wrap: Broadcom (AVGO) and OKTA wrap & News/Research

Good morning. Futures -40bps off slightly. Asia green overnight with a nice bounce in Korea +9% although memory names underperformed with Samsung/Hynix only +6%. TPX +1.9%, NKY +1.9%, Hang Seng +0.28%, HSCEI -0.38%, SHCOMP +0.64%, Shenzhen +1.17%, Taiwan TAIEX +2.57%, Korea KOSPI +9.63%…BTC -1.4%. Yields rising 3-4bps across the curve.

Hock delivered last night which should have bulls feeling better on the margins. Some interesting comments from Hock re: copper which has CRDO/ALAB +9%/+6% early and LITE/COHR down. Full comments below but here’s the basic gist:

Our XPU customers will likely continue to stay on direct attached copper, and this is a huge advantage as the alternative of going to optical is more expensive and requires significantly more power….And the best way to do that is use direct attached copper. That’s the lowest latency, lowest power, and lowest cost.”

Lots of OAI news, including them at $25B ARR and run-rating closer to $30B based on the last week.

Lots to get to so let’s get to it…we’ll hit up AVGO/OKTA Earnings first then the usual…

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AVGO +6%: JanQ beat, big AprQ guide beat driven by AI semis, and FY27 AI visibility lifted to >$100B

Overall, solid numbers: rev/EPS landed between street and buyside, AI semi at $8.4B grew 106% y/y and beat street but fell short of the buyside bogey at $9B. Q2 guide better: $22B rev is a massive beat to the $20.5B street (47% y/y growth) but just in line with bogeys and $10.7B AI semi rev obliterates the $9.3B street # and above the $10B+ # we heard buyside was at. EBITDA margin at 68% for both Q1 and Q2 guide is well above your 66.75% expectation, helping put a floor on the margin debate and help quiet some margin bears: 68% EBITDA on a quarter where AI was 65% of semi rev shows COT/Anthropic isn't cratering margins the way some feared. Overall solid print and bulls should feel better coming out of this given sentiment going in - let’s see if stock can hold up better than NVDA. Bull #s moving up slightly and sit around $20-22 in ‘27. Bulls will say throw a 25x multiple on that and you get $500.

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