Broadcom Q3 Earnings Outlook
Broadcom is set to announce its earnings on Thursday, December 12, with analysts projecting earnings per share (EPS) to reach $1.39, reflecting a robust 26% annual growth. Expected revenue stands at $14.1 billion, marking a remarkable 51% increase compared to the previous year. Analysts forecast an improvement in gross margins to 76.6%, a rise from 74% a year ago. The semiconductor division’s revenue is predicted to grow by 9.9% to $8.1 billion, driven significantly by $3.5 billion in AI-related earnings.
The semiconductor sector has seen heightened stock performance due to surging global demand for AI technology. As a result, Broadcom’s stock has appreciated by 53% year-to-date, while the Philadelphia semiconductor index has risen by 20% over the same period.
Nonetheless, geopolitical tensions, particularly between the U.S. and China, pose challenges. Chinese industry groups have advised local companies to be cautious about purchasing U.S. chips, suggesting that these products may no longer be secure, leading them to seek domestic alternatives. The trade strains are escalating ahead of President-elect Donald Trump's anticipated return, during which he has proposed significant tariffs, targeting China specifically.
Strategies for Trading AVGO Earnings
Following encounters with resistance in the 184-186 range, AVGO's share price has retreated, subsequently bouncing back from the support level at 157.50. Currently, it remains above both the 100-day and 200-day Simple Moving Averages (SMA) and recently surpassed the 50-day SMA.
A breakthrough above the 184-186 resistance is essential for the stock to establish a new high and potentially reach record levels. Key support is identified at 157.50, with the 200-day SMA positioned at 153.00.
MARA and Cryptocurrency Stocks Surge as Bitcoin Reaches $100K
MARA, MicroStrategy, and other Bitcoin-related stocks are poised for attention this week as Bitcoin has soared past the $100K mark, reaching an all-time high of $103.6K. Optimism surrounding Donald Trump’s recent appointments, including Paul Atkins taking the helm at the SEC and replacing Gary Gensler, has contributed to this rally, with Atkins known for his favorable stance towards Bitcoin and the wider crypto market.
This optimistic sentiment is bolstered by anticipation of more favorable cryptocurrency regulation in Washington and strong inflows into Bitcoin ETFs, which now hold more Bitcoin than the original Satoshi wallet. This new phase of institutional investment is likely to provide additional support for Bitcoin's price surge.
Furthermore, corporate buying is becoming a significant factor in demand dynamics. MicroStrategy recently increased its Bitcoin holdings to 402,100 BTC, valued at around $40 billion. MARA follows closely as the second-largest corporate holder with 22,108 BTC, currently worth about $2.17 billion, and plans to acquire more. Given the scale of these investments, MARA's stock price is closely tied to Bitcoin's value.
This week, Microsoft will be voting on a proposal regarding Bitcoin investment, though the board has recommended against it. Should the proposal pass, it could further legitimize Bitcoin and significantly influence its market price.
Strategies for Trading MARA
After a period of consolidation below the 200-day SMA since August, MARA broke above this resistance in mid-November, marking an 8-month high of 30.00 before retreating to consolidate around 26.00. The 50-day SMA is crossing above the 200-day SMA, indicating a bullish 'golden cross' signal, and the RSI is above 50, suggesting potential for further upward movement.
Buyers are looking to reclaim the 30.00 mark to extend gains towards 34.00, the projected peak for 2024.
On the downside, support stands at the December low of 23.00, with the 200-day SMA sitting at 19.40.
GameStop Q3 Earnings Expectations
GameStop’s stock experienced a significant rise last week spurred by a cryptic online post from influential meme stock advocate Keith Gill. Gill, who rose to prominence following his bullish stance on the video game retailer during the trading frenzy of 2021, has recently returned to social media after a three-year hiatus, stimulating renewed interest around the meme stock phenomenon.
This year alone, GameStop's stock has surged by 76%. Investors are keen to see if the forthcoming financial results will corroborate the underlying optimism or indicate a potential market collapse reminiscent of past speculative bubbles.
Despite market enthusiasm, GameStop has been grappling with challenges linked to the industry's shift towards digital commerce. The company's projected recovery is fraught with obstacles.
Q2 results highlighted a significant drop in sales, plummeting to $789 million from $1.16 billion year-over-year, while operating expenses have climbed. Forecasts for fiscal 2025 suggest a 23% reduction in sales compared to the previous year. Post Q3 earnings, no conference call or guidance is anticipated.
How to Trade GME Earnings
After a downward trend from July to October, GME began to recover, rallying to 32.12 in late November. Although the price has since eased, it remains above a crucial support zone around 25.00, which, coupled with an RSI above 50, keeps the prospects for further gains hopeful.
For upward momentum, buyers need to break above the resistance at 32.10 to aim for a round number target of 40.00 and the previous high from early June.
A drop below 25.00 could potentially lead to support levels at 23.00 (the 100-day SMA) and 22.70 (trendline support).
