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Investing.com - Oppenheimer has raised its price target on Broadcom Limited (NASDAQ:AVGO) to $305.00 from $265.00 while maintaining an Outperform rating on the stock. The semiconductor giant, currently valued at $1.3 trillion, has demonstrated robust financial performance with a 33.85% year-over-year revenue growth and impressive gross profit margins of 77.03%.
The price target increase represents a 15% upside from the previous target and is based on 32 times Oppenheimer’s calendar year 2026 earnings per share estimate, which is above the semiconductor group average. According to InvestingPro analysis, Broadcom is currently trading at elevated multiples with a P/E ratio of 97.44, suggesting the stock may be overvalued relative to its peers.
Oppenheimer cited Broadcom’s expanding earnings power over time, sticky and stable industrial and infrastructure exposure, and defensible technology as key factors supporting confidence in the company’s business and financial model.
The research firm believes Broadcom deserves to trade at a multiple closer to in line with its peer group, justifying the higher price target despite already trading above the sector average.
The updated outlook comes as Broadcom continues to integrate its recent acquisitions and expand its presence in high-growth semiconductor markets.
In other recent news, Broadcom has abandoned its plans to invest in a microchip plant in Spain after negotiations with the Spanish government fell through. This decision comes at a time when there is global competition for semiconductor manufacturing capacity. Meanwhile, Goldman Sachs has initiated coverage on Broadcom with a Buy rating and a price target of $315, highlighting the company’s strong position in infrastructure software and its potential growth in artificial intelligence (AI). JPMorgan has reiterated an Overweight rating with a $325 price target, emphasizing strong AI demand and potential growth in Broadcom’s custom AI XPU business. Mizuho (NYSE:MFG) also maintains an Outperform rating, forecasting that Broadcom will achieve significant gross and operating margins by fiscal 2026, driven by an increasing AI mix. Additionally, Fitch Ratings has assigned a ’BBB’ rating to Broadcom’s proposed senior notes issue, noting the company’s strengthened financial flexibility and increased free cash flow due to its software portfolio expansion. Fitch expects Broadcom’s revenue growth to be driven by AI infrastructure demand, although potential excess capacity at customers poses a medium-term risk.
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