Melius Research raises Broadcom target price to $415 from $335

Melius Research raises Broadcom target price to $415 from $335

Melius Research has raised its target price for Broadcom (NASDAQ: AVGO) to $415 from $335, reflecting the semiconductor giant's recent performance and growth prospects. The upgrade comes amid a series of positive developments, including a significant AI deal and optimistic revenue forecasts.

Broadcom announced a massive new AI infrastructure deal, securing over $10 billion in orders from a new customer. CEO Hock Tan projected "significantly improved" AI revenue growth for fiscal year 2026, with total projected ASIC revenue reaching $30 billion for that period. Tan's decision to extend his tenure through 2030 also provided reassurance to investors.

The stock has delivered impressive performance, with a 102% return over the past year and currently trading near its 52-week high. Multiple investment banks have raised their price targets for Broadcom following the announcement, with Morgan Stanley increasing its target to $382, HSBC to $400, and BofA Securities and Barclays also raising their targets to $400. Analysts call the new deal a "turning point" for Broadcom's AI revenue outlook.

Broadcom's strong financial metrics include a 31.59% profit margin and 77.2% gross profit margins, demonstrating strong operational efficiency. The company generated $59.93 billion in trailing twelve-month revenue with $18.81 billion in net income available to common shareholders. Despite some concerns about valuation and AI market share claims, the company's strategic positioning in custom chip design for major technology companies continues to draw positive attention from analysts and investors.

References:
[1] https://tokenist.com/why-did-broadcom-shares-surge-in-premarket-trading-today/
[2] https://www.investing.com/news/analyst-ratings/morgan-stanley-raises-broadcom-stock-price-target-on-ai-growth-outlook-93CH-4226066
[3] https://www.investing.com/news/analyst-ratings/broadcom-stock-holds-steady-as-wolfe-research-reiterates-peerperform-93CH-4226064