Broadcom (NASDAQ: AVGO) received a fresh vote of confidence after Raymond James initiated coverage with an ‘Outperform’ rating and a new price target of $420.
The new target implies a potential 23% rally for AVGO from the last closing price of $340. Notably, the stock has been weighed down in the short term by the broader market downturn, ending Friday’s session down almost 2%, but it remains up 46% year to date.
The firm’s analyst, Simon Leopold, highlighted Broadcom’s strengthening position in custom AI accelerators, an area increasingly favored over general-purpose chips as the AI hardware race intensifies.
To that end, Leopold expects estimate revisions to trend upward as the company continues to gain share in the rapidly evolving AI ecosystem.
Although non-AI segments have been restraining growth, the outlook for those businesses is beginning to improve. Leopold also emphasized that Broadcom’s software margins and cash-flow generation remain underappreciated by the market, suggesting meaningful room for valuation expansion.
The company’s deep capabilities in chiplets, networking IP, and co-packaged optics strengthen its competitive moat and reinforce its strategic positioning.
Raymond James based its valuation on 30 times projected FY27 earnings, a framework that reflects the firm’s view of Broadcom as a high-margin, diversified leader with durable advantages in both semiconductors and software despite competition from established entities such as Nvidia.
Wall Street bullish on AVGO stock
Overall, Broadcom (AVGO) continues to attract bullish sentiment on Wall Street, with analysts maintaining a strong outlook for the stock over the next 12 months. Based on forecasts from 31 analysts at TipRanks, Broadcom carries a ‘Strong Buy’ rating, supported by 29 buy recommendations and only two holds.
Analysts project an average price target of $399.52, suggesting a 15.2% upside from the recent trading level of $346.82. Expectations vary, with the most optimistic target reaching $480, while the lowest estimate stands at $300.
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