Broadcom Rocks At AI Event: Here's What Got These Analysts Most Excited

Broadcom Inc AVGO recently announced projections for AI chip sales for 2024.

The company is among the beneficiaries of massive AI investments by corporations. It hosted an “Enabling AI Infrastructure Investor Meeting” on Wednesday; here are some key analyst takeaways from the event.

BofA Securities On Broadcom

Analyst Vivek Arya reiterated a Buy rating and price target of $1,276.

The event “increased our confidence in upside to FY25E including expanding AI accelerator (XPU) and high-speed switching opportunity,” Arya wrote in a note. Broadcom announced that a third custom ASIC accelerator customer, “potentially ByteDance?”, is in the pipeline and could begin ramping volumes later this year, Arya added.

While reiterating its AI sales outlook of over $10 billion in fiscal 2024, management emphasized that Broadcom is a leader in high-speed switches Ethernet, “which per AVGO is the only way to support the coming wave of 1mn+ AI accelerator clusters (vs. 30K cluster size currently),” the analyst further stated.

JPMorgan On Broadcom

Analyst Harlan Sur maintained an Overweight rating and price target of $1,700.

Broadcom presented a “compelling and sustainable growth strategy for its AI datacenter networking/ASIC business, Sur said.

“Broadcom is targeting custom AI silicon (ASIC) opportunities for consumer internet companies” and highlighted its pipeline in this business, which extends through 2026 with Alphabet GOOG GOOGL and Meta Platforms Inc META while announcing a third customer, the analyst stated.

“The team is driving strong product innovation and sustaining its leadership profile in each of its networking businesses given its strong R&D scale ($3B+ per year),” Sur added.

Check out other analyst stock ratings.

Benchmark On Broadcom

Analyst Cody Acree reaffirmed a Buy rating and price target of $1,720.

Broadcom’s announcement of a third new customer for its custom AI accelerators was “the most interesting quick takeaway” from the event, Acree said.

With the new customer add and growth of its AI Infrastructure business, the company raised its expectations for its percentage of semiconductor revenue in fiscal 2024 from 25% to 35%, projecting AI-related revenues to surpass $10 billion, the analyst stated. He added that Broadcom represented “a key vehicle for investors to participate in the industry’s AI adoption.”

Goldman Sachs On Broadcom

Analyst Toshiya Hari reiterated a Buy rating and price target of $1,550.

“We come away from the meeting with a better appreciation of Broadcom’s strategy, competitive moat, and growth opportunity across Networking and Compute Acceleration within the context of AI,” Hari wrote in a note.

“Mr. Kawwas reiterated Broadcom’s strategy which is to identify and participate in markets that are durable (i.e. 10 year horizon) and those in which the company either has or can construct a sustainable leadership position,” the analyst stated. Hari added that the AI infrastructure market “meets these conditions,” which is why Broadcom has been focusing on “the areas of networking and custom compute to date.”

Rosenblatt Securities On Broadcom

Analyst Hans Mosesmann maintained a Buy rating and price target of $1,276.

“AI silicon is now expected to account for 35% of 2024 revenues driven by a significant custom ASIC inflection with the top 2 customers and a new 3rd customer, which we believe will match size and multi-generational engagement,” Mosesmann said.

“The setup between Nvidia’s NVDA AI compute roadmap (GPU-centric, proprietary CUDA, Infiniband networking, and NVLink connectivity) and Broadcom’s “open” standards (custom/merchant XPU, open Ethernet, open PCIe, history of power efficiency) is a battle of the titan’s over time,” he added.

AVGO Price Action: Shares of Broadcom had risen by 8.71% to $1,386.70 at the time of publication on Thursday.

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