HSBC raises Broadcom stock price target to $240 from $225

On Friday, HSBC analysts raised the price target for Broadcom Limited (NASDAQ:AVGO) stock to $240 from $225 while maintaining a Hold rating. The adjustment follows Broadcom’s third-quarter fiscal year 2025 revenue guidance, which is projected at $15.8 billion. This figure represents a 5% increase quarter-over-quarter and aligns with consensus estimates. With a current market capitalization of $1.22 trillion and trading near its 52-week high of $265.43, InvestingPro analysis suggests the stock is currently overvalued relative to its Fair Value.

Broadcom’s third-quarter fiscal year 2025 AI revenue guidance stands at $5.1 billion, marking a 16% rise quarter-over-quarter. This surpasses HSBC’s estimate of $4.6 billion and the consensus estimate of $4.7 billion. The growth is attributed to a stronger quarter-over-quarter increase in ASIC sales, although AI networking revenue is expected to decrease to 30% of AI revenues from 40% in the previous quarter. The company’s impressive revenue growth trajectory continues, with InvestingPro data showing a robust 40.3% year-over-year revenue growth in the last twelve months.

The company’s non-AI semiconductor revenue and infrastructure software revenue are anticipated to remain stable quarter-over-quarter. Broadcom’s gross margin guidance for the third quarter of fiscal year 2025 is set at 78.1%, which is a decrease of 135 basis points due to a higher ASIC mix. However, this figure is above HSBC’s estimate of 77.1% and the consensus estimate of 77.6%. According to InvestingPro, Broadcom maintains impressive gross profit margins of 76.26% and has received a "GREAT" overall Financial Health Score, with 20+ additional exclusive insights available to subscribers.

HSBC’s revised price target reflects the analysts’ assessment of Broadcom’s financial outlook and market conditions. The Hold rating indicates that the analysts do not currently recommend buying or selling the stock. For a deeper understanding of Broadcom’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which provides detailed analysis of the company’s financial health, valuation metrics, and growth potential.

In other recent news, Broadcom Inc. reported impressive financial results for the second quarter of 2025, exceeding earnings expectations. The company achieved an earnings per share (EPS) of $1.58, slightly surpassing the forecast of $1.57. Broadcom’s revenue reached a record $15 billion, slightly above the anticipated $14.95 billion, marking a 20% year-on-year increase. The company’s AI semiconductor revenue saw a significant surge of 46% year-on-year. Broadcom has provided guidance for the third quarter, projecting a revenue forecast of $15.8 billion, indicating continued growth. The company anticipates AI semiconductor revenue to grow by 60% year-on-year in the upcoming quarter. Additionally, Broadcom’s focus on AI networking and custom accelerators has been highlighted as a strategic advantage in the competitive technology landscape. Despite the positive earnings results, Broadcom’s stock experienced a minor decline, reflecting mixed investor sentiment.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.