‘Ride the Wave,’ Says Investor About Broadcom Stock

Broadcom (NASDAQ:AVGO) has certainly been on quite a roll. The company’s share price has surged 65% over the last year – riding a strong wave of AI capex spending amongst the hyperscalers.

That’s not to say that 2025 hasn’t had its share of ups and downs. Like many other tech firms, Broadcom’s share price was pressured by the tariff tit-for-tat – and fell by double digits in the days following the April 2^nd Liberation Day announcement.

In addition, there were plenty of fears regarding a slowdown in capex spending, a development which would certainly have repercussions for the supplier of data center networking solutions.

However, AVGO has surged over 50% since the early April nadir, thanks to calming trade waters as well as numerous pronouncements from the hyperscalers that their massive capex spending plans remain on track.

One investor known by the pseudonym Lighting Rock Research is confident that this bodes well for continued growth going forward.

“Hyperscalers’ sustained and rising CAPEX signals healthy near-term growth for Broadcom’s semiconductor solutions, especially in custom silicon for AI and cloud,” explains the 5-star investor.

Lighting Rock has plenty of evidence to back up this assertion. The investor cites recent pronouncements by Alphabet, Microsoft, and Amazon, who all confirmed their previously articulated intentions. In addition, Meta recently raised its full year capex guidance from $64 billion to $72 billion.

Moreover, just last week Broadcom announced its 3^rd generation of co-packaged optics (CPO) with 200G/lane capability. The CPO is designed to address bandwidth, power, and latency issues that arise with large-scale AI machine learning computing, notes the investor.

“I think the new solutions could strengthen its leadership in passive optical components in AI switches and the ASIC ecosystem,” adds Lighting Rock.

The investor is not ignoring the potential for future trade-related risks to throw a wrench in Broadcom’s prospects, and will be eager to understand on the company’s upcoming earnings call how they plan on addressing these issues.

Still, Lighting Rock has faith that Broadcom’s technological prowess will translate into dollar signs, especially as its wares help the big firms as they build up their AI infrastructure.

“Its technology is mission-critical for these hyperscalers’ custom silicon chips and data center expansions,” concludes Lighting Rock Research, who rates AVGO a Strong Buy. (To watch Lighting Rock Research’s track record, click here)

Wall Street has a high degree of confidence in AVGO as well. With 24 Buy and 2 Hold ratings, AVGO enjoys a Strong Buy consensus rating. Its 12-month average price target of $244.05 has an upside of ~6%. (See AVGO stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.