Throughout most of 2024, Broadcom (NASDAQ: AVGO) was on a slow, gradual climb in terms of stock price.
That state of affairs changed as we drew close to mid-December — a smaller, initial surge on account of a rumored new deal with Apple (NASDAQ: AAPL) occurred on December 11, and was followed up a day later with a more decisive move to the upside following the company’s Q4 and full-year 2024 earnings report.
While earnings per share (EPS) beat analyst estimates, revenues came in slightly short of consensus forecasts. However, the market’s reaction was quite positive — the price of Broadcom stock jumped from $180 to $250 in short order.
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That 38.88% rally wasn’t sustainable — since then, the price of an AVGO share has receded to $224.41 at press time. This mark represents a 24.67% increase from the prices seen before the earnings report — and the year-to-date (YTD) return on Broadcom stock sits at 106.75%.
Before the release of the earnings call, the average analyst forecast for AVGO stock price was $200 — soon after the report, major Wall Street firms began setting price targets as high as $230 and $250 — although a fair share of bearish sentiment was also present. Now, two highly-regarded equity researchers have revisited their price targets — and they seem quite bullish.
UBS and Morgan Stanley increase AVGO stock price targets
On December 23, Timothy Arcuri, the leader of semiconductor research at UBS, reissued a prior ‘Buy’ rating while raising his price target on Broadcom stock to $270 from $220. This new price target represents a 20.31% upside from the current AVGO stock price.
After a review of Broadcom’s serviceable adressamble market (SAM) disclosures, UBS assessed its view of the company’s custom compute and AI networking segments. As a result, the firm’s revenue estimates for UBS in FY26 and FY27 were raised by roughly 20% and 40%, respectively.
Arcuri added that: ‘Even with these higher estimates, we still see room for upside given our middle-of-the-road market share assumptions and the strong likelihood of significant SAM expansion if/when Broadcom adds two additional hyperscalers to its AI customer base.’
An ever-so-slightly less bullish outlook was also shared by Morgan Stanley (NYSE: MS) semiconductor researcher Joseph Moore, who reiterated a previous ‘Overweight’ rating on December 20.
The analyst increased his price target to $265 from $233 — a mark that represents an 18.08% upside from the current AVGO stock price. In a note shared with investors, Moore noted that: ‘Although the AI industry is showing signs of a U-shaped bottom continuing to play out elsewhere, the attractive assessment of the group remained unchanged.’
The revised price target came as a result of Morgan Stanley’s deep dive into its semiconductor sector coverage area — readers should note that the firm singled out Nvidia (NASDAQ: NVDA) as the most attractive stock in the entire semiconductor industry.
Featured image via Shutterstock
