Tech Leads Stocks Higher After Broadcom Earnings Boom
Friday, Dec 13, 2024 5:44 pm ET
3min read The tech sector led the stock market higher on Friday, driven by strong earnings from Broadcom Inc. (AVGO). The semiconductor giant's fiscal fourth-quarter results topped expectations, with AI-related revenue surging. This positive news boosted investor sentiment and propelled Broadcom's stock to a record high, joining the trillion-dollar market cap club.
Broadcom's AI chip sales more than tripled to $12.2 billion in fiscal 2024, with analysts projecting they could reach $30 billion by 2027. Mizuho analysts even forecasted over $50 billion in AI revenue in fiscal 2027. This growth, driven by AI's expanding footprint, has significantly contributed to Broadcom's earnings growth and stock surge.
Strategic partnerships, such as with Apple and OpenAI, have also played a crucial role in driving Broadcom's earnings growth and stock surge. Apple is reportedly working with Broadcom to develop its own AI chips, while OpenAI is using Broadcom's AI inference chip for ChatGPT. These collaborations have helped Broadcom's AI sales more than triple to $12.2 billion in fiscal 2024, with analysts projecting they could reach $30 billion by 2027.
Analysts have raised their price targets for Broadcom following its fiscal Q4 2024 earnings, reflecting optimism about the company's AI-related revenue growth. Citi analysts raised their target to $220 from $205, while Bank of America lifted it to $250 from $215, and Mizuho set a new target of $245. These revisions suggest analysts expect Broadcom's AI sales to more than triple to $12.2 billion in fiscal 2024 and potentially reach $30 billion by 2027, driven by strong demand from major customers like Apple and OpenAI.
In conclusion, Broadcom's strong earnings and AI-related revenue growth have driven the company's stock to a record high and a market capitalization above $1 trillion. Strategic partnerships and a growing AI market size have contributed to this success, with analysts projecting continued growth in the coming years. As the tech sector continues to lead the stock market higher, investors should keep a close eye on Broadcom and other AI-focused companies for potential investment opportunities.
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