Broadcom (AVGO) has reportedly ended its acquisition discussions with analytics software firm SAS Institute, per The Wall Street Journal. Broadcom was in talks to pay between $15 billion and $20 billion to acquire SAS, according to a report by The Wall Street Journal on Monday, July 12.
The deal would have expanded Broadcom’s software business, which contributed 27% of total revenues in Broadcom’s last reported quarter. The semiconductor manufacturer had earlier strengthened its foothold in the software space with the acquisitions of CA Technologies and Symantec’s enterprise security business. (See Broadcom stock chart on TipRanks)
Recently, Broadcom was indicted by the Federal Trade Commission for monopolizing the semiconductor chips used for television and broadband internet services. Following this news, Credit Suisse analyst John Pitzer reiterated a Buy rating on the stock with a price target of $580, implying a 19.8% upside potential to current levels. However, despite expecting the settlement with the FTC to have no material impact on Broadcom’s financials, he offered a cautious outlook for the company.
Pitzer said, “We see significant consolidation, slowing supply growth and performance hungry workloads especially around AI shifting the balance of ASP power towards Semis," referring to Broadcom's business model.
Consensus among analysts is a Strong Buy based on 17 Buys and 2 Holds. The average Broadcom price target of $543.71 implies 11% upside potential to current levels.
Furthermore, TipRanks’ Stock Investors tool shows that investors who hold portfolios on TipRanks currently have a Very Positive stance on Broadcom, with 3.9% of investors increasing their exposure to AVGO stock over the past 30 days.
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