Broadcom is the IBD Stock Of The Day as the semiconductor and infrastructure software provider is increasingly seen as an AI stock. Broadcom stock is in record high territory.
In afternoon trades on the stock market today, Broadcom stock fell 3.4% to close at 1,317.50. That's just below its all-time high of 1,438.17, reached on March 4. Its high point occurred in the 20%-to-25% profit-taking zone of its breakout from earlier this year.
On Jan. 19, Broadcom stock broke out of an ascending base at a buy point of 1,151.82, according to IBD MarketSurge charts.
After retreating from its record high, Broadcom bullishly bounced off its 10-week moving average line, MarketSurge charts show. An early entry can be seen at 1,403.61.
Basking In AI Event Glow
Broadcom received a flurry of bullish analyst reports after the company held an investor event titled "Enabling AI Infrastructure" on March 20. At the event, Broadcom revealed that it added a new customer for its AI chip business, which makes application-specific integrated circuits, or ASICs.
In addition to custom AI processors, Broadcom also supplies networking and switching chips for data centers. Lately, it has focused on artificial intelligence applications, which require high-speed and high-bandwidth capabilities.
At the AI event, Broadcom reiterated its goal of more than $10 billion in AI chip revenue this fiscal year. That would be up 140% over last year.
"Broadcom is extremely well positioned both in networking as well as custom accelerators in both the near and long term," Piper Sandler analyst Harsh Kumar said in a recent client note. "In our opinion, AI is a decade-long trend and Broadcom is well positioned, having active participation in all of the relevant connectivity products such as custom XPUs (multiple processing unit types), networking, and ancillary products such as optics."
Kumar rates Broadcom stock as overweight, or buy, with a price target of 1,650.
Broadcom Stock On 2 IBD Lists
Meanwhile, Broadcom and market leader Nvidia are "frenemies" in the AI chip space, Rosenblatt Securities analyst Hans Mosesmann said in a client note. Customers support both companies and their differing technology approaches, he said.
"The setup between Nvidia's AI compute roadmap (GPU-centric, proprietary CUDA, InfiniBand networking, and NVLink connectivity) and Broadcom's 'open' standards (custom/merchant XPU, open Ethernet, open PCIe, history of power efficiency) is a battle of the titans over time," Mosesmann said.
Mosesmann rates Broadcom stock as buy with a price target of 1,500.
Further, Broadcom stock is on two IBD lists: Big Cap 20 and Tech Leaders.
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