Hock Tan, CEO of Broadcom.
Lucas Jackson | Reuters
After Market cap of over $1 trillion on Friday and a 24% increase for the best day on record, Broadcoms The stock rose another 11% on Monday, boosted by increased price targets from Wall Street.
The recent rally was fueled by Broadcom’s better-than-expected earnings report late Thursday and an optimistic first-quarter outlook. Broadcom, which sells semiconductors and infrastructure software, is seeing increasing demand due to the boom in generative technologies artificial intelligence and reported a 220% increase in AI revenue for the year to $12.2 billion.
Goldman Sachs Analysts who recommend buying Broadcom shares raised their 12-month target to $240 from $190, citing additional major customers for custom silicon products. They also pointed to management’s implementation after the $61 billion compensation Purchase of VMwarewhich closed last year.
“We are now even more confident in the company’s future revenue and earnings growth prospects,” analysts wrote in a Dec. 15 report.
Barclays raised its price target on the stock to $205 from $200, while Truist raised its forecast to $260 from $245.
Broadcom shares are now up 126% this year, closing at $250 on Monday. Nvidiawhich is the main beneficiary of the AI craze due to the popularity of its graphics processing units (GPUs), has surged more than 165% this year to reach a market cap of $3.2 trillion. The Nasdaq is up 34%.
Broadcom refers to its custom AI accelerators as XPUs, which are different from the GPUs that Nvidia sells. Broadcom said it doubled shipments of XPUs to “our three hyperscale customers” in the quarter. The company does not name the customers, but analysts believe there are three Meta, alphabet and TikTok parent ByteDance.
