Analyst Jay Goldberg at Seaport Global downgraded Broadcom (AVGO) stock from Buy to Hold, signaling a more cautious view after its strong run. Goldberg said much of the recent gains are now “fully factored into consensus,” limiting near-term upside. Despite the downgrade, AVGO stock rose about 2% on Thursday, extending its rally after the company recently signed multi-year deals with Google (GOOGL) and Anthropic to supply custom AI chips and data center components.
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New trading tool for NVDA bearsFor context, Broadcom designs and supplies semiconductor chips and infrastructure software used in data centers, networking, broadband, and wireless systems.
Why Is Seaport Not Bullish on AVGO Stock?
Seaport’s Goldberg highlighted several reasons for a more cautious view on AVGO. He stated that while Broadcom remains a leading player in AI compute, competing closely with Nvidia (NVDA), the company is starting to face industry limits similar to those affecting Nvidia.
Goldberg also noted that Broadcom could become involved in financing customers, particularly supporting the construction of new AI data centers, including projects tied to Anthropic. He pointed to Broadcom’s press release mentioning discussions with operational and financial partners as evidence of this involvement.
Notably, the downgrade reflects some caution in the industry. As chip companies like Broadcom get involved in helping fund AI data centers or other customer projects, adding financial and operational strain. Essentially, they’re not just selling chips—they’re also putting money into customers’ projects, which can limit their flexibility.
At the same time, Broadcom is expanding its partnership with Google to supply AI chips through 2031. This is a positive sign that the company’s technology remains in high demand, but the analyst’s downgrade shows that the market may have already priced in much of this growth.
Is AVGO a Good Stock to Buy?
Despite Seaport’s more cautious outlook, Broadcom continues to enjoy strong support from Wall Street. AVGO stock holds a Strong Buy consensus rating, based on 27 Buys and four Holds. Meanwhile, the average AVGO stock price target of $464.32 indicates 32.4% upside potential from current levels.
