Broadcom is the IBD Stock Of The Day as shares of the chipmaker and infrastructure software provider near a formal buy point ahead of the company's fiscal third-quarter earnings report. AVGO stock erased morning gains Thursday.
Broadcom stock has formed a lopsided double-bottom base with a buy point of 177.10, according to IBD stock analysis. Aggressive investors could have used Monday's high of 167.83 as an early entry point on Thursday.
Meanwhile, IBD MarketSurge charts show a formal buy point of 185.16 from a 10-week consolidation pattern.
On the stock market today, Broadcom stock shed 2.1% to close at 162.34.
The next major catalyst for Broadcom stock is likely the company's fiscal Q3 earnings report due on Sept. 5.
However, AVGO stock might move in response to commentary from industry peer Nvidia, which will post its fiscal second-quarter results late Wednesday. While Nvidia is the leader in general-purpose processors for artificial intelligence, Broadcom leads in making custom AI chips optimized for specific workloads.
Broadcom Stock: New AI Chip Customers
On Thursday, JPMorgan analyst Harlan Sur reiterated his overweight rating on Broadcom stock with a price target of 200.
In a client note, Sur said he believes Broadcom recently scored OpenAI as its fourth major customer for AI chips. Broadcom already makes application-specific integrated circuits, or ASICs, for artificial intelligence for Alphabet's Google, Meta Platforms and TikTok parent ByteDance.
"We believe that Broadcom has recently won OpenAI's first- and second-generation AI ASIC programs targeted to ramp in calendar 2026," Sur said.
In addition, Broadcom appears to have added a fifth major AI ASIC customer also targeted to ramp production in 2026, Sur said. He did not identify that fifth customer.
"Management has recently talked about a $150 billion-plus AI semiconductor opportunity over the next 5 years (which implies a 30%-40% per year growth rate in AI revenues over this period of time)," Sur said.
Broadcom stock ranks second out of 39 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. AVGO stock has an IBD Composite Rating of 98 out of 99.
Nvidia is the top-ranked company in the industry group with a best-possible Composite Rating of 99.
Both Broadcom and Nvidia are on the IBD Tech Leaders list.
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