Broadcom’s Strong AI and Networking Growth Justifies Buy Rating

Analyst Blayne Curtis from Jefferies maintained a Buy rating on Broadcom (AVGO – Research Report) and keeping the price target at $300.00.

Blayne Curtis’s rating is based on Broadcom’s strong performance and growth prospects in its AI and Networking segments. The company’s AI business is projected to continue its robust growth, driven by the ramp-up of its Ironwood TPU and the expansion of its ASIC offerings, with expectations of significant increases in AI revenue through FY25 and FY26. The Networking segment also shows promise, with Ethernet’s growing dominance in both scale-out and scale-up scenarios.
Additionally, Broadcom’s execution in the VMWare business has been commendable, with a high conversion rate to the VCS platform and double-digit annual recurring revenue growth. Despite some headwinds in the non-AI business, the company’s overall financial performance remains strong, with impressive gross and operating margins. These factors contribute to the positive outlook and justify the Buy rating given by Blayne Curtis.

In another report released today, Susquehanna also reiterated a Buy rating on the stock with a $300.00 price target.

Based on the recent corporate insider activity of 57 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AVGO in relation to earlier this year.