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On Friday, KeyBanc analysts increased the price target for Broadcom Limited (NASDAQ: NASDAQ:AVGO) stock to $315 from a previous target of $275, maintaining an Overweight rating. This adjustment follows Broadcom’s second-quarter results for fiscal 2025, which showed solid performance and mixed guidance for the third quarter. According to InvestingPro data, the stock is trading near its 52-week high of $265.43, with analysts maintaining a strong bullish consensus.
The company’s revenue growth was driven by its Infrastructure Software (ETR:SOWGn) segment, particularly due to VMware. The Semiconductor and AI Semiconductor revenues were reported at $4.4 billion, aligning with expectations. AI Networking revenue increased by 170% year-over-year, while AI ASICs also showed significant growth. InvestingPro data reveals impressive financial metrics, including a 76.26% gross profit margin and overall revenue growth of 40.3% in the last twelve months.
Broadcom announced that its AI revenues are projected to grow by 60% in fiscal year 2025, compared to a previous estimate of 45%. The company expects this growth rate to continue into fiscal year 2026. This projection is supported by the expansion of AI ASIC customers, including META (NASDAQ:META) and ByteDance, alongside existing clients like Google (NASDAQ:GOOGL).
The analysts expressed optimism regarding Broadcom’s AI business prospects, leading to the revised estimates and price target. They reiterated their Overweight rating, reflecting confidence in the company’s future performance.
In other recent news, Broadcom Inc. reported impressive financial results for the second quarter of 2025, with earnings per share (EPS) of $1.58, narrowly surpassing the forecast of $1.57. The company achieved a record revenue of $15 billion, slightly above the anticipated $14.95 billion, marking a 20% year-on-year increase. Broadcom has also provided guidance for the third fiscal quarter, projecting revenue of $15.8 billion, reflecting a 21% year-on-year growth. The company’s AI semiconductor revenue is expected to grow by 60% year-on-year, continuing its momentum in AI technologies. Deutsche Bank (ETR:DBKGn) analysts have raised Broadcom’s stock price target to $270, citing growth in the AI segment, while HSBC increased their price target to $240, acknowledging Broadcom’s third-quarter revenue guidance. Both firms maintain a positive outlook on the company’s financial trajectory, highlighting the strength in AI and infrastructure software segments. Broadcom’s management remains confident in its dominance in ethernet connectivity despite competition, with expectations for continued growth into fiscal 2026.
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