Citi Raises Broadcom Stock Target, Highlights Artificial Intelligence Performance and Strategic Acquisitions Via Investing.com

On Thursday, Citi maintained a Buy rating on shares of Broadcom Limited (NASDAQ:) and raised its price target to $1,750 from $1,560. This adjustment follows Broadcom’s recent report of financial results that exceeded market expectations, largely attributed to strong performance in its artificial intelligence (AI) segment and VMware (NYSE:) integration, which together accounted for 46% of the company’s second-year sales fiscal quarter 2024

Broadcom’s artificial intelligence revenue forecast for fiscal year 2024 was increased from more than $10 billion to more than $11 billion, in line with Citi’s forecasts. The company reiterated its confidence in Broadcom, citing its potential to continue to outperform consensus estimates. This optimism is based on anticipated benefits from the company’s AI initiatives and synergies gained from the VMware acquisition.

In a significant development for the company, Broadcom announced a 10-to-1 stock split, effective July 15. The split is expected to increase the liquidity of the shares and make them more accessible to a wider range of investors.

Citi’s new $1,750 price target reflects a multiple of 33 times estimated calendar-year 2025 earnings per share. This valuation represents a 10% discount to Broadcom’s AI peers, suggesting a conservative approach to the company’s growth prospects in a competitive AI market. intelligence .

Broadcom’s upward price target revision and affirmation of a Buy rating reflect a positive outlook for the company’s financial performance, supported by strategic acquisitions and a growing presence in the artificial intelligence sector.

In other recent news, Broadcom Limited saw a number of positive revisions from analysts on the back of strong second quarter results and strong AI revenue growth. Mizuho, ​​Baird, Rosenblatt Securities, Jefferies and UBS raised their price targets for the company, reflecting a vote of confidence in Broadcom’s market position and future prospects.

The company’s second-quarter consolidated net revenues reached $12.5 billion, up 43% year-over-year, primarily driven by AI revenue growth of 280% to $3.1 billion.

Broadcom’s fiscal 2024 revenue forecasts have been revised upwards to $51 billion, expecting a significant contribution from its artificial intelligence segment, which is expected to exceed $11 billion.

Despite a forecast decline in its storage business, the company expects a recovery in server-to-storage connectivity in the second half of the year. Broadcom’s strong financial outlook is further supported by fiscal 2024 gross margin and operating margin forecasts of 77% and 59%, respectively.

These recent developments highlight Broadcom’s strong growth in key areas, particularly artificial intelligence, and suggest a positive growth trajectory for the company. However, please remember that these are projections and actual results may vary.

InvestingPro Insights

Broadcom Limited’s (NASDAQ:AVGO) recent achievements and strategic moves, including the successful integration of VMware and impressive performance in the artificial intelligence segment, not only caught the attention of Citi analysts but were also reflected in key metrics. With a solid market capitalization of $693.05 billion and a forward-looking P/E ratio of 55.12, the company’s financial health appears to be strong. Q1 2024 revenue growth was 12.94% over the trailing twelve months, representing a positive trajectory. Moreover, Broadcom has consistently rewarded shareholders, as evidenced by a dividend yield of 1.4% and a significant dividend growth rate of 14.13% over the same period.

InvestingPro’s advice highlights Broadcom’s enduring commitment to returning profits to shareholders, with the company raising its dividend for 14 consecutive years. Additionally, analysts predict an increase in sales this year, which is in line with Citi’s forecasts and may contribute to increasing the company’s potential for further excellent results. For those who want to dig deeper into Broadcom’s investment profile, 17 additional InvestingPro tips are available, offering a comprehensive analysis of the company’s market position and financial health. Investors interested in these insights can take a closer look at InvestingPro’s dedicated Broadcom website at https://www.investing.com/pro/AVGO. To improve your research with these step-by-step tips, use the coupon code PRONEWS24 for an additional 10% off 1 or 2-year Pro and Pro+ subscriptions.

This article was generated with the assistance of AI and reviewed by an editor. More information can be found in our Regulations.