Bank of America thinks Broadcom can continue to cash in on the artificial intelligence boom, with the company showing "no signs of slowing down." Analyst Vivek Arya reiterated a buy rating on the chipmaker in a Monday note and maintained a $215 per share price target. BofA's forecast implies more than 25% upside from Monday's $171.
42 close. Broadcom stock has advanced nearly 54% in 2024, as the company emerged as one of the key beneficiaries of the rise of AI outside of Nvidia . The strong demand it's seeing was evident in its better-than-expected second-quarter results .
A 10-for-1 stock split it recently announced took effect on Monday. AVGO YTD mountain Broadcom stock. Arya said Broadcom is BofA's top AI pick thanks to the company's "multiple vectors of growth.
" Following a conversation with Broadcom CEO Hock Tan, Arya said he expects AI to grow into a $30 billion to $50 billion opportunity over the next three to five years. The market, which should contribute $11 billion in sales in fiscal 2024, will encompass networking, interconnects and accelerator segments, he said. Tan described Broadcom's customers as being split between public cloud vendors and consumer-facing AI platforms such as Meta and Google-parent Alphabet.
The mix of this customer base will help stoke and maintain future demand, Arya noted. "AVGO sees these large consumer AI customers to continue investing and reach 1mn+ xPU [excluding processing unit] clusters over the next 3-5 years (from 100k this year), .
