Broadcom (AVGO) stock has rallied more than 97% over the past year as investors expect the company to benefit from artificial intelligence (AI) tailwinds. The company, which offers semiconductors and AI infrastructure, is gaining from the strong demand for its custom AI accelerators (called XPUs) and networking solutions. Most analysts remain bullish on AVGO stock and view it as one of the key beneficiaries of the ongoing AI wave.
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Last month, Broadcom impressed investors with its better-than-expected earnings for the fourth quarter of Fiscal 2024, though sales marginally missed estimates. The company’s Q4 sales jumped 51% to $14.1 billion, driven by the VMware acquisition and AI-induced demand for its offerings. The company’s AI revenue jumped 220% to $12.2 billion in Fiscal 2024. Broadcom sees the market opportunity for its XPUs and AI networking offerings between $60 billion and $90 billion by 2027.
Analysts Remain Bullish on Broadcom’s AI Opportunities
Recently, Mizuho analyst Vijay Rakesh boosted the price target for AVGO stock to $260 from $245 and reiterated a Buy rating as part of his outlook for semiconductors and automotive tech companies in 2025. Rakesh named Broadcom one of his top picks for 2025 and sees continued strength in AI, custom silicon, and connectivity as well as memory and storage.
Likewise, Barclays analyst Thomas O’Malley increased the price target for Broadcom stock to $260 from $205 and reaffirmed a Buy rating, calling AVGO, Marvell Technology (MRVL), and Nvidia (NVDA) as top beneficiaries of the ongoing AI wave.
Further, earlier this month, Citi analyst Christopher Danely reiterated a Buy rating on AVGO stock with a price target of $220. The analyst reaffirmed his bullish stance following reports by various media outlets about a potential ban on more AI chip shipments to China. The analyst stated that he has “long given up trying to predict government policy,” but is optimistic that even if Broadcom is prohibited from shipping its chips to Bytedance (which he believes is AVGO’s third largest ASIC customer), the upside from the rest of the AI-related opportunities will offset any risk.
Is Broadcom Stock a Buy, Sell, or Hold?
With 23 Buys and three Holds, AVGO stock scores a Strong Buy consensus rating. However, given the stellar rally over the past year, the average AVGO stock price target of $237.60 indicates a modest downside of 1.4% from current levels.
