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Investing.com - Mizuho Securities has raised its price target for Lumentum (NASDAQ:LITE) to $325 from $290, citing potential benefits from Google’s expanding TPU deployments.
Google plans to offer TPU (Tensor Processing Unit) capacity to Meta (NASDAQ:META) in 2026, with potential spending reaching billions of dollars on installing TPUs in Meta data centers by 2027, according to Mizuho analyst notes released Tuesday.
The expanded TPU deployment represents a positive development for Broadcom (NASDAQ:AVGO) ahead of its December 11 earnings report, building on tailwinds from Google’s recent Anthropic partnership. Mizuho maintains Broadcom as its "TOP PICK" in the semiconductor space. With a market cap of $1.78 trillion and impressive gross profit margins of 77.19%, Broadcom has shown strong revenue growth of 28.01% over the last twelve months. InvestingPro data shows the company is trading at a P/E ratio of 95.86, though its PEG ratio of 0.37 suggests it may be undervalued relative to its growth potential.
Nvidia (NASDAQ:NVDA) demand remains strong based on recent guidance and the company’s reiteration of its $500 billion revenue target through 2026, with Blackwell GPUs reportedly sold out. Mizuho notes that while TPU adoption is increasing, Nvidia remains "the King" in AI acceleration.
Lumentum stands to benefit as a key Google Cloud Platform partner from the TPU ramps, while Micron (NASDAQ:MU) continues to see HBM (High Bandwidth Memory) growth with strong recent spot prices potentially driving upside to February quarter guidance. Analysts remain highly bullish on Broadcom with a consensus recommendation of 1.3 (Strong Buy) ahead of its earnings report on December 11. InvestingPro subscribers can access 20+ additional insights and the comprehensive Pro Research Report on Broadcom, available for 1,400+ top US stocks, providing clear, actionable intelligence for smarter investing decisions.
In other recent news, Broadcom has unveiled its Brocade X8 Directors and Brocade G820 56-port switch, marking the industry’s first 128G Fibre Channel platforms tailored for AI workloads. These new platforms feature advanced encryption and post-quantum cryptography, aimed at enhancing data security against future quantum computing threats. Additionally, Raymond James has assumed coverage on Broadcom with an Outperform rating, citing the company’s strong position in the AI sector and potential for upward estimate revisions. Jefferies has also raised its price target for Broadcom to $480, maintaining a Buy rating due to growth in the company’s AI ASIC business. Google, a key Broadcom customer, has significantly increased its token processing, underscoring this growth potential. Mizuho has adjusted its price target for Broadcom to $435, highlighting the company’s new customer, Anthropic, which is expected to generate substantial revenue in the coming years. These developments reflect Broadcom’s strategic advancements and expanding influence in the AI domain.
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