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On Friday, Citi analysts increased the price target for Broadcom Limited (NASDAQ: NASDAQ:AVGO) stock to $285 from $276, maintaining a Buy rating. This target sits within the broader analyst range of $201-$325, with Broadcom currently trading near its 52-week high of $265.43. The decision follows Broadcom’s recent earnings report, which showed mixed results and guidance.
The company reported strong performance in its artificial intelligence segment, which accounted for 29% of its fiscal second-quarter 2025 sales, contributing to impressive revenue growth of 40.3% over the last twelve months. However, Broadcom faced challenges with lower margins, attributed to a higher semiconductor mix and increased options expenses. According to InvestingPro data, the company maintains strong gross profit margins of 76.26%.
Broadcom’s gross margins were guided lower, with the semiconductor mix representing 56% of fiscal second-quarter 2025 sales. The company anticipates its AI business to grow 60% year-over-year in fiscal 2025 and 2026, driven by increased AI adoption.
Citi analysts reiterated their Buy rating on Broadcom stock, citing the expected growth in the AI sector as a key factor for the revised price target.
In other recent news, Broadcom Limited has reported its earnings for the April quarter, which met expectations, and provided guidance for the July quarter, slightly surpassing consensus estimates with a projection of approximately $15.8 billion. The company anticipates a significant increase in AI semiconductor revenue, projecting more than 60% year-over-year growth in the second half of fiscal year 2026. Analysts from Mizuho (NYSE:MFG), Piper Sandler, and UBS have raised their price targets for Broadcom, citing strong demand for AI-related products and robust financial performance. Mizuho increased its target to $310, Piper Sandler to $300, and UBS to $290, all maintaining positive ratings on the stock.
Furthermore, BofA Securities also raised its price target for Broadcom to $300, emphasizing the company’s capital appreciation potential and consistent dividend growth. JPMorgan has set a new price target of $325, following a favorable patent ruling related to Acadia Pharmaceuticals, which could impact Broadcom’s market position. Broadcom’s AI revenue is expected to reach $5.1 billion in the July quarter, representing a 16% quarter-over-quarter growth, driven by strong deployments in AI inference and networking.
The company continues to make advancements with the launch of Tomahawk 6, enabling large-scale AI clusters, and anticipates further growth in broadband and networking revenues. Despite some near-term challenges, Broadcom’s strategic positioning in the AI sector remains strong, with industry-leading gross and operating margins forecasted for fiscal year 2025. Analysts have expressed confidence in Broadcom’s long-term prospects, with expectations of continued growth in custom ASICs and Ethernet solutions for hyperscaler customers.
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