Investment banks lift Broadcom price targets after strong results

Investing.com - Broadcom (NASDAQ:AVGO) released impressive quarterly results earlier this week, and a number of investment banks have responded positively, raising their price targets as a result.

The chipmaker raised its forecast for annual revenue from AI-linked chips to $11 billion from $10 billion, raised its annual revenue and core profit projections and announced a 10-for-1 stock split.

The rising adoption of generative AI has been driving demand for companies such as Broadcom that provide chips and networking tools to support these intensive applications.

Its stock closed Thursday at $1,678.52, having gained over 12% on the day and over 50% year-to-date.

Deutsche Bank has lifted its 12-month price target to $1,900 from $1,400, and EPS estimates, while keeping a ‘buy’ rating.

“Overall, we believe AVGO [Broadcom] remains one of the most attractive options within the semiconductor industry, having a strong exposure to the AI megatrend, a core business primed for a cyclical rebound, and growth/synergy potential within the recently acquired VMware (NYSE:VMW),” analysts at the German bank said, in a note dated June 13.

JPMorgan also lifted its year-end price target, to $2,000 from $1,700, raising its forward estimates, while maintaining an ‘overweight’ rating.

“Overall, the team continues to drive a stable revenue growth profile even in a period of macro volatility given its portfolio breadth/diversification/product cycles,” JPMorgan said, in a note dated June 13. 

Goldman Sachs has also lifted its 12-month price target to $1,850, from $1,550, while also increasing its FY2024-26 revenue and non-GAAP EPS estimates, on average, by 7% and 6%, respectively. 

The bank maintained a ‘buy’ rating.

“Alongside Nvidia (NASDAQ:NVDA), we view Broadcom as a critical piece to the ongoing AI infrastructure build-out,” analysts at Goldman said, in a note dated June 13.