Shares of Broadcom (AVGO) surged in trading on Friday after the chip giant’s Q4 earnings beat consensus estimates and it issued solid guidance. In fact, the company’s market capitalization hit $1 trillion on Friday, fueled by Wall Street analysts’ enthusiasm about the stock.
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AVGO Expects AI Sales to Surge over the Long Term
During theearnings call AVGO’s CEO Hock Tan commented that the serviceable addressable market for custom AI accelerators, or XPUs, could be between $60 billion and $90 billion in FY27.
According to Jefferies’ five-star-rated analyst Blayne Curtis, Tan’s projection comes from Broadcom’s existing AI application-specific integrated circuit (ASIC) customers, including tech giants like Google (GOOGL) and Meta Platforms (META). Furthermore, Curtis believes this figure could grow further if Broadcom secures business from other tech giants such as Microsoft (MSFT) and Amazon (AMZN).
As a result, Curtis reiterated a Buy rating on the stock and raised his price target to $225 from $205. The analyst’s price target implies an upside potential of 24.5% from current levels.
Morgan Stanley Analyst Is also Enthusiastic about AVGO Stock
Furthermore, five-star-rated Morgan Stanley analyst Joseph Moore described the outlook as a “relief,” especially given concerns about a slowdown in chip orders from Google, and expects “momentum to build from here over the course of CY25.” As a result, Moore raised his price target to $233 from $180 and maintained a Buy rating. Moore’s price target implies an upside of 28.9% from current levels.
Is AVGO a Buy or Sell?
Analysts remain bullish about AVGO stock, with a Strong Buy consensus rating based on 15 Buys and two Holds. Over the past year, AVGO has increased by more than 60%, and the average AVGO price target of $204.62 implies a downside potential of 5.2% from current levels.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
