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Valued at a market cap of $1.1 trillion, Broadcom Inc. (AVGO) is a leading global provider of semiconductor and infrastructure software solutions, specializing in complex digital and mixed-signal CMOS devices and analog III-V products. Based in Palo Alto, California, the company serves diverse industries, including enterprise networking, telecommunications, data centers, and industrial automation.
Shares of the technology giant have significantly outperformed the broader market over the past 52 weeks. AVGO stock has surged 85.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 20.3%. However, shares of AVGO are up 1.3% on a YTD basis, lagging behind SPX's 2.7% gain.
In addition, AVGO has outpaced the Technology Select Sector SPDR Fund's (XLK) 13.8% return over the past 52 weeks.
Broadcom shares soared 24.4% after its strong Q4 earnings on Dec. 12, with revenue surging 51.2% year-over-year to $14.1 billion, driven by AI semiconductor and VMware demand. AI revenues skyrocketed 150%, fueled by custom AI accelerators (XPUs) and networking solutions. Strong Q1 2025 guidance, including $14.6 billion in projected revenue and 65% AI growth, reinforced investor confidence.
Moreover, the stock rallied 4.3% on Feb. 5 after Alphabet projected $75 billion in capital expenditures for 2025, signaling continued strong demand for AI infrastructure, including Broadcom’s custom AI ASIC accelerators. This alleviated market fears sparked by DeepSeek’s low-budget AI model, which had raised concerns that AI development might require less computing power than previously expected.
For the current fiscal year, ending in October 2025, analysts expect AVGO's EPS to grow 45% year-over-year to $5.38. The company's earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 33 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 30 “Strong Buy” ratings and three “Holds.”
On Dec. 20, 2024, Morgan Stanley analyst Joseph Moore reiterated its “Buy" rating on Broadcom and set a $265 price target.
As of writing, AVGO is trading below the mean price target of $247.76. The Street-high price target of $300 implies a potential upside of 28.6% from the current price levels.
