Shares of Broadcom (AVGO) plunged in morning trading on Friday after the chip major announced better-than-expected Fiscal Q3 results but investor optimism was dampened by a cautious revenue forecast. As semiconductor stocks surged fueled by excitement over AI, chipmakers are now facing the pressure of high expectations.
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Wall Street Analysts’ View on AVGO’s Earnings
Following AVGO’s earnings, Jefferies analyst Blayne Curtis acknowledged the weaker guidance but highlighted that AI revenue is expected to bounce back in the fourth quarter. Moreover, the analyst emphasized Broadcom’s strong positioning in custom AI chips and noted that the chip major’s acquisition of VMware had a positive impact on revenue and earnings.
Curtis is bullish about AVGO, with a Buy rating and a price target of $205, implying an upside potential of 47.5% from current levels.
Meanwhile, five-star-rated Benchmark analyst Cody Acree reiterated a Buy on AVGO stock following its Q3 results. Acree stated that although the chip major delivered a modest beat for the July quarter, its guidance was slightly below expectations. He also noted that Broadcom’s AI business lacked the growth momentum the market had hoped for.
However, Acree believes that investors should use the short-term volatility in AVGO’s shares as an opportunity to buy the stock, as Broadcom remains a key player in AI adoption. Acree has a price target of $210 on the stock, implying an upside potential of 51.1% from current levels.
Is AVGO Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AVGO stock based on 23 Buys and three holds, as indicated by the graphic below. After an 60% rally in its share price over the past year, the average AVGO price target of $198.66 per share implies a 44.6% upside potential.
