On Thursday, Rosenblatt Securities increased its price target on Broadcom Limited (NASDAQ: NASDAQ:AVGO) shares to $2,400 from the previous $1,650. The firm retained its Buy rating on the stock.
The new price target is based on expectations of high-teens sales growth and a $75 Non-GAAP EPS by FY26, attributed to the momentum in AI infrastructure networking/ASIC and enhanced enterprise software synergies.
The analyst at Rosenblatt Securities highlighted the forthcoming 10-for-1 share split scheduled for next week as a factor in the revised price target. The split is expected to enhance the stock's liquidity.
The firm's optimism is further bolstered by Broadcom's performance in artificial intelligence semiconductor sales, which constitute over 40% of the company's sales mix.
For the fiscal year 2024, Rosenblatt anticipates Broadcom to surpass its recently increased sales target of $51 billion. This projection is driven by robust AI semiconductor sales and a successful integration of VMware (NYSE:VMW), a recent acquisition by Broadcom that is expected to contribute to its growth trajectory.
The price target adjustment reflects confidence in Broadcom's strategic initiatives and its positioning in the market. The company's focus on AI infrastructure and enterprise software is seen as a significant driver of its financial performance in the coming years.
The updated price target from Rosenblatt Securities comes ahead of Broadcom's anticipated share split, marking a positive outlook for the company as it continues to expand its presence in the AI and enterprise software sectors.
In other recent news, Broadcom Inc. has been making significant strides in the tech industry. The company recently released pro forma financials following its merger with VMware Inc., providing stakeholders with a clearer picture of the combined entity's financial trajectory.
Furthermore, Broadcom's second-quarter earnings surpassed expectations, reporting sales of $12.49 billion and earnings per share of $10.96. The company's AI-related revenue forecast was also raised to over $11 billion for the current year.
In addition to these financial highlights, Broadcom announced a 10-for-1 stock split set to take effect later this year, a move that aligns with the company's consistent growth trajectory. Analyst firms Piper Sandler, Oppenheimer, and Wells Fargo (NYSE:WFC) have raised their price targets for Broadcom, driven by strong AI and VMware growth.
These recent developments reflect Broadcom's robust growth in key areas, particularly in AI. However, it's important to note that these are analyst projections and actual results may vary. As always, investors are encouraged to review the detailed financial information to gain insights into the company's performance and potential future outlook.
InvestingPro Insights
Amidst Rosenblatt Securities' optimistic outlook on Broadcom Limited (NASDAQ: AVGO), real-time data and expert analysis from InvestingPro provide additional context for investors considering the stock. According to InvestingPro, Broadcom has a robust market capitalization of $812.13 billion and a price-to-earnings (P/E) ratio of 74.64, reflecting a strong market valuation. The adjusted P/E ratio for the last twelve months as of Q2 2024 stands at 70.52, indicating a high earnings multiple that investors may weigh against potential growth.
InvestingPro Tips highlight that Broadcom has not only raised its dividend for 14 consecutive years but also maintained these payments for 15 years, signaling a commitment to returning value to shareholders. Analysts have revised their earnings upwards for the upcoming period, suggesting that the company's financial outlook may be improving. Additionally, with a 1-year price total return of 101.28%, Broadcom's stock performance has been impressive, potentially attracting investors looking for strong historical returns.
For those interested in a deeper dive into Broadcom's financials and future prospects, InvestingPro offers a range of additional tips, including insights into the company's valuation multiples and profitability. Investors can unlock these valuable tips and more by using the exclusive coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at https://www.investing.com/pro/AVGO. With 19 additional InvestingPro Tips available, investors have a wealth of information at their fingertips to make well-informed decisions.
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