Key Takeaways
Chipmaker Broadcom's ( AVGO ) latest earnings-fueled rise has made it the newest member of the $1 trillion dollar club . But what's next for the stock?
Some on Wall Street see artificial intelligence -driven demand poised to push sales of its chips to fresh highs, powering its stock higher in 2025. But others are more cautious—in the near term, at least.
Shares of both Nvidia and Broadcom have more than doubled in value in 2024, placing them among the S&P 500's top performers for the year. Analysts, however, are more bullish on the former, with high expectations for Nvidia in early 2025 and the expectation that Broadcom's next big break could come further down the line.
Broadcom's "robust AI story is finding its own ' Nvidia moment '" as the AI business picks up steam, Bernstein analysts told clients Monday. But they also warned that Broadcom's "core business remains fairly lousy," with material opportunities potentially years away.
Broadcom’s AI Sales Soar
Broadcom’s recent gains have drawn comparisons to Nvidia’s meteoric rise.
Demand for its chips that support AI has surged, pushing sales to record levels . Broadcom said its fiscal 2024 revenue from AI more than tripled year-over-year to $12.2 billion, helping boost its total sales for the year above $51 billion.
CEO Hock Tan on Broadcom's latest earnings conference call said the company sees its “opportunity over the next three years in AI as massive,” according to a transcript provided by AlphaSense, with several of its customers still expanding their AI infrastructure and its own AI business expected to outgrow other segments.
Analysts, however, appear less certain about Broadcom stock’s room to rise. While all 14 of the analysts covering Broadcom tracked by Visible Alpha hold a “buy” or equivalent rating, their average price target of $238 would represent only a partial recovery from Wednesday's losses and a decline from the stock’s all-time closing high, set Monday.
Bernstein analysts expect the “material opportunity” for Broadcom could be a few years out. They have an “outperform” rating on the shares, along with a $250 price target that is about 12% above Wednesday's close—which came after its shares tumbled 7% in a Fed-driven tech selloff .
All but one of 20 analysts covering Nvidia tracked by Visible Alpha hold a “buy” or equivalent rating for Nvidia, with their consensus price target of about $177 implying roughly 37% upside from Wednesday's closing price around $129.
Broadcom Makes Analysts' ‘Top Picks’ for 2025
Still, Broadcom is a popular name on Wall Street.
Bank of America listed Broadcom among its top semiconductor industry picks for 2025, identifying it as an “AI leader” alongside Nvidia and Marvell Technology ( MRVL ).
And JPMorgan, which called the stock a “top pick” when it hiked its price target to $250 last week, said it expects Broadcom’s AI revenues could jump another 40% in fiscal 2025, with expanding market share in the next few years as it grows its customer base.
“The stock has clearly been held back,” Morgan Stanley analysts said, telling clients they “expect momentum to build from here.” Broadcom, they wrote, could present “one of the most compelling ways to play AI semis over the next 2-3 years” behind Nvidia.
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