Broadcom (AVGO) stock surged on Thursday following a strong earnings report and news of an upcoming 10-for-1 stock split. At least 19 Wall Street firms raised their price targets for Broadcom after the company’s quarterly report late Wednesday.
Jordan Klein, a trading desk analyst at Mizuho Securities, noted that Broadcom’s report would likely intensify “fear of missing out” (FOMO) trading in AI hardware stocks. In a client note Thursday, Klein highlighted AI chip leader Nvidia (NVDA), networking gear maker Arista Networks (ANET), and memory-chip maker Micron Technology (MU) as additional beneficiaries of the FOMO trend.
On Thursday, Broadcom stock jumped 12.3%, closing at $1,678.99, after reaching a record high of $1,735.85 earlier in the session. Nvidia stock rose 3.5% to $129.61, Arista advanced 6.5% to $331.67, and Micron increased 1.7% to $143.14.
“Broadcom remains a must-own name in AI, given it is the true leader in non-GPU (graphics processing unit), custom AI silicon,” Klein said. “No one is even close to their capabilities, nor can match their deep existing relationships with most of the large cloud hyperscalers.” He also noted Broadcom’s critical high-speed networking products for AI data centers.
BofA Securities analyst Vivek Arya called Broadcom a “top 2 AI pick” alongside Nvidia in a client note Thursday. Arya reiterated his buy rating on Broadcom stock and raised his price target to $2,000 from $1,680. The 10-for-1 stock split will take effect on July 15. Arya pointed out Broadcom’s growth potential in custom AI processors, Ethernet networking, and upsells for its VMware infrastructure software.
Barclays analyst Tom O’Malley described Broadcom’s fiscal second-quarter report as a “mic drop.” He maintained his overweight rating on Broadcom stock and increased his price target to $2,000 from $1,500.
Jefferies analyst Blayne Curtis suggested that Broadcom’s AI revenue guidance for the full fiscal year “seems conservative.” Broadcom now expects AI revenue of over $11 billion, up from its previous estimate of more than $10 billion. With $5.4 billion in AI sales already in the first half of the year, Broadcom is “already halfway there,” Curtis noted in a client note Thursday. He maintained his buy rating on Broadcom stock and raised his price target to $2,050 from $1,550.
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