Broadcom Is A Buy For ‘AI, Dividends And M&A Benefits,’ Analyst Says: Takeaways From Q4 Earnings

JPMorgan On Broadcom

Analyst Harlan Sur maintained an Overweight rating while lifting the price target from $1,550 to $1,700.

Broadcom delivered better-than-expected quarterly results and reiterated its full-year outlook of $50 billion in revenues and 60% EBITDA margin, “on sustained momentum in semiconductors and solid growth in its mission critical software franchise,” Sur wrote in a note.

“For its semiconductor business, the team saw accelerating demand for its AI solutions ($2.3B in the Jan-Qtr, up 50%+ Q/Q) which offset weakness in its core diversified semi business (ex-AI ~$5.1B down 12% Q/Q,” Sur added.

Goldman Sachs On Broadcom

Analyst Toshiya Hari maintained a Buy rating while bumping the price target from $1,325 to $1,550.

Broadcom delivered “solid” results for the quarter, with non-GAAP earnings beating Street expectations by 6% “on strength in the AI semiconductor business and strong synergy capture immediately following the VMware acquisition,” Hari said.

The analyst recommended “use any stock price weakness as an opportunity to add to positions,” given the company’s “robust competitive position in AI and its ability to extract better growth and margins in Software intact.”

BofA Securities On Broadcom

Analyst Vivek Arya reaffirmed a Buy rating while raising the price target from $1,500 to $1,680.

“As expected, AVGO maintained its FY24 sales outlook of $50bn, though with mix shifting more towards AI (now >$10bn vs $7.5bn prior), with traditional enterprise (server storage) and telco segments experiencing the same inventory digestion as indicated by peer MRVL and others,” Arya wrote.