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On Friday, JPMorgan analysts raised the price target for Broadcom (NASDAQ:AVGO) Limited stock (NASDAQ: AVGO) to $325 from $250, while maintaining an Overweight rating. The semiconductor giant, currently trading near its 52-week high with a market capitalization of $1.22 trillion, has shown remarkable strength with an 88% return over the past year. According to InvestingPro data, the company maintains impressive gross profit margins of 76% and has achieved 40% revenue growth in the last twelve months. The move follows a favorable ruling for Acadia Pharmaceuticals regarding its 721 formulation patent for Nuplazid, which could extend market exclusivity for the drug.
The U.S. District Court for the District of Delaware ruled in favor of Acadia, affirming the validity and infringement claims of its 721 patent against Aurobindo Pharma (NSE:ARBN) and other ANDA filers. This patent protects the Nuplazid 34mg capsule formulation until 2038, potentially delaying generic competition.
JPMorgan analysts noted that the appeal process could take one to two years, but expressed high confidence in Acadia’s position. They highlighted a similar case, Allergan (NYSE:AGN) vs MSN, which was resolved in favor of Allergan, suggesting a positive outlook for Acadia.
Acadia’s composition of matter (COM) patent, which covers pimavanserin and its salts until 2030, is currently under appeal at the U.S. Court of Appeals for the Federal Circuit. Analysts believe the ruling should favor Acadia, extending the drug’s market exclusivity.
The revised price target reflects these updates, with analysts considering potential headwinds from price negotiations under the IRA and competitive threats from generic entrants after the COM patent expiry in 2030. InvestingPro analysis suggests the stock is currently trading above its Fair Value, with analysts maintaining a strong buy consensus (1.41 rating). For deeper insights into Broadcom’s valuation and 20+ additional ProTips, including dividend history and growth metrics, explore the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Broadcom Limited has been the focus of several analyst reports, all highlighting its strong position in the AI sector. Following Broadcom’s recent earnings report, which showed AI revenues of $4.4 billion for the April quarter, various firms have adjusted their price targets for the company. Mizuho (NYSE:MFG) raised its target to $310, citing strong AI demand and a projected increase in AI semiconductor revenue by more than 60% year-over-year. Piper Sandler also increased its target to $300, acknowledging Broadcom’s solid quarterly results and strategic positioning in AI spending trends.
Evercore ISI set a price target of $304, maintaining an Outperform rating and noting the company’s strong AI revenue momentum, with projections of significant growth into fiscal year 2026. UBS analysts increased their target to $290, highlighting Broadcom’s potential in custom ASICs and Ethernet solutions despite some near-term challenges. Morgan Stanley (NYSE:MS) raised its target to $270, emphasizing Broadcom’s robust market position and long-term growth trajectory in the AI sector.
Broadcom’s guidance for the July quarter includes AI revenue expectations of $5.1 billion, a 16% increase from the previous quarter. The company’s financial outlook remains strong, with industry-leading gross and operating margins projected for fiscal year 2025. These recent developments underscore Broadcom’s strategic opportunities and growth potential in the rapidly evolving AI industry.
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