Broadcom Poised for Growth: Buy Rating Affirmed Amid Synergies and AI Networking Expansion

In a report released today, Matt Ramsay from TD Cowen upgraded Broadcom (AVGO – Research Report) to a Buy, with a price target of $1,500.00.

Matt Ramsay has given his Buy rating due to a combination of factors that suggest significant growth potential for Broadcom. These include the expected revenue and operational expenditure synergies from the recent acquisition of VMWare and the additional upside from Broadcom’s custom silicon and AI networking ventures. Additionally, Ramsay’s outlook takes into account the market’s current expectations for cyclicality in the non-AI semiconductor verticals, which are already reflected in consensus views.

Ramsay’s upgrade to Outperform is further supported by the ramp-up of a third major customer for Broadcom’s custom silicon AI accelerator, alongside existing relationships with industry giants like Google. This move indicates a potential for substantial revenue growth in the Networking segment. Moreover, Ramsay believes that Broadcom’s networking solutions are well-placed to capitalize on the surge in AI-driven demand, with both Ethernet and Infiniband technologies poised to gain from the AI growth wave sweeping through hyperscale data centers.

In another report released on March 19, Barclays also initiated coverage with a Buy rating on the stock with a $1,405.00 price target.

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Broadcom (AVGO) Company Description:

Broadcom, Inc. is a technology company offering semiconductor and infrastructure software solutions. It operates through two segments: Semiconductor Solutions (includes semiconductor solution product lines and IP licensing) and Infrastructure Software (Includes mainframe, BizOps and cyber security software solutions and FC SAN business). The company was founded in 1961 and is headquartered in San Jose, CA.