On Friday, Broadcom Limited (NASDAQ:AVGO) received an updated price target from a KeyBanc analyst, reflecting positive sentiment on the company's recent performance and future prospects. The new price target is set at $260.00, up from the previous $210.00, while the Overweight rating remains unchanged.
With a market capitalization of $844 billion and trading near its 52-week high, Broadcom has delivered an impressive 68% return over the past year. According to InvestingPro data, analyst targets for the stock range from $155 to $250, with a strong buy consensus.
The semiconductor company reported its fourth fiscal quarter results for October and provided guidance for the first fiscal quarter of January that exceeded expectations. This positive outlook is driven by robust growth in AI Networking and Wireless revenues, which have helped to balance out the weaker performance in Infrastructure Software (ETR:SOWGn) revenues due to delayed VMWare deals.
InvestingPro analysis shows Broadcom's impressive revenue growth of 32% over the last twelve months, with the company maintaining a strong gross profit margin of 75%. The company's overall financial health is rated as GREAT, supported by strong profitability and momentum scores.
Broadcom's AI Networking revenue for the fourth quarter reached $3.4 billion, marking a significant year-over-year increase of 158%. This surge is attributed to the company's expansion in the AI accelerator market, which is projected to grow significantly.
Based on estimates from Broadcom's three major customers—Google (NASDAQ:GOOGL), Meta (NASDAQ:META), and Byte Dance—the AI accelerator Serviceable Available Market (SAM) is expected to expand to between $60 billion and $90 billion by fiscal year 2027, representing a compound annual growth rate of approximately 62%.
Additionally, Broadcom announced the acquisition of two new customers for its AI ASIC products, Apple (NASDAQ:AAPL) and OpenAI, further solidifying its position as a premier provider of custom AI ASICs. The analyst from KeyBanc expressed optimism about Broadcom's results and its strategic outlook, leading to increased estimates and the raised price target.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.