Broadcom Inc. (NASDAQ: AVGO), one of the world’s leading semiconductor manufacturers, has seen remarkably good performance this year.
At press time, AVGO stock is trading at $183.18 — it has rallied by 11.68% over the last thirty days, bringing returns for the last six months to 42.78% — Broadcom shares are up 68.77% year-to-date (YTD).
In July, the company announced a $5 billion bond deal made with JPMorgan, TD Bank, and Truist Securities aimed at paying down some of the debt that has been accrued by the $69 billion acquisition of VMware Inc completed in November of 2023. On October 2, it issued additional notes.
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As a result of this move, the business tweaked its long-term guidance — it now projects earnings per share (EPS) in 2025 to total $6.50, up from the previous $6.47 estimate.
Wall Street equity researchers seem to have taken note of the decision — made even more impactful by the fact that AVGO’s next earnings call is due December 5. Analysts from five major firms — Bank of America, DBS, Truist Financial, Cantor Fitzgerald, and Mizuho have since revised their price targets or reiterated buy ratings.
Wall Street sees upside for AVGO stock price
After a meeting between Bank of America (NYSE: BAC) and Broadcom’s chief executive officer (CEO) Hock Tan, chief financial officer (CFO) Kirsten Spears, and head of investor relations (IR) Ji Yoo, BofA researcher Vivek Arya maintained his ‘Buy’ rating, raising his price target to $215. Arya opined that Broadcom is transforming from ‘a value stock to a growth stock because of accelerating AI and VMWare contributions’.
DBS analyst Fang Boon Foo likewise maintained his ‘Buy’ rating, raising his target price slightly from $204 to $205. Similarly, Truist Securities’ William Stein kept his ‘Buy’ recommendation, setting his target at $205 as well.
Mizuho Securities issued the biggest revision — while the firm reiterated a previous ‘Outperform’ rating, it raised the price target from $190 to $220.
Last but not least, CJ Muse, senior managing director at Cantor Fitzgerald increased his price target to $225 up from $200 — reiterating a ‘Buy’ rating. Muse noted that Broadcom is among the AI and AI-adjacent companies that Cantor Fitzgerald is most bullish on.
Of the 27 researchers who issue ratings for the stock, 24 rate it a ‘Buy’ — with only 3 ‘Hold’ ratings. Although bullish, the average price aligns more closely to DBS’ and Truist’s conservative estimates at $199.57, a mark that would represent a 9.97% upside.
Insider selling at AVGO raises concerns
Recent insider sales by Broadcom’s Chief Legal and Corporate Affairs Officer, Mark David Brazeal have left some investors worried that all is not well behind the scenes at AVGO. The pertinent SEC filing reveals that he sold over $7 million worth of shares in early October.
However, this would be a rash conclusion — while Brazeal has sold 39,180 shares, he still retains 380,560, lending credence to the theory that this was simply profit-taking, not a legitimate bearish signal.
As it stands, AVGO is poised to profit greatly from the ongoing AI boom — the semiconductor company is a leader in networking innovations. The recent release of the Sian 2 DSP PHY, a competitive, industry-leading connectivity product, is expected to shore up the company’s next earnings call, due December 5.
