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Investing.com - Deutsche Bank raised its price target on Broadcom Limited (NASDAQ:AVGO) to $350 from $300 while maintaining a Buy rating, citing stronger-than-expected artificial intelligence growth prospects. The semiconductor giant, currently trading near its 52-week high of $317.35, has delivered impressive returns of over 100% in the past year and maintains a "GOOD" financial health rating according to InvestingPro analysis.
The bank noted that while Broadcom’s recent report and guidance were relatively in-line with expectations, the company’s AI-related commentary was "decidedly more bullish" than anticipated.
Broadcom indicated its AI revenue, which represents approximately 30-35% of its business mix, is expected to grow 20% quarter-over-quarter in fiscal fourth quarter and accelerate further into fiscal year 2026.
The chipmaker is benefiting from increased market share at its three original XPU customers and will begin ramping up with a newly announced fourth customer, which Deutsche Bank believes to be OpenAI for inference applications initially.
Deutsche Bank projects Broadcom will leverage its record $110 billion backlog to generate more than $40 billion in AI revenue in fiscal year 2026, representing approximately 115% year-over-year growth compared to its previous estimate of 60% growth.
In other recent news, Broadcom reported fiscal third-quarter results that surpassed analyst expectations, leading to a positive response in the semiconductor sector. The company’s guidance for the October quarter is approximately $17.4 billion, exceeding consensus estimates of $17.0 billion. Mizuho raised its price target for Broadcom to $355, citing the company’s growth outlook in artificial intelligence (AI). Similarly, Morgan Stanley increased its price target to $382, highlighting Broadcom’s credible management and AI growth opportunities. Goldman Sachs maintained its Buy rating and $360 price target, noting the company’s solid quarter and new custom silicon customer, which could significantly boost AI semiconductor revenue by 2026. HSBC also reiterated its Buy rating with a $400 price target following Broadcom’s announcement of a new ASIC customer, expected to contribute an additional $10 billion in ASIC revenue by 2026. These developments reflect Broadcom’s strategic moves and strong performance in the semiconductor industry.
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