Broadcom Sees AI Revenue Surge as Stock Continues to Climb

Published 2 days agoAVGO

Broadcom Sees AI Revenue Surge as Stock Continues to Climb

Broadcom's stock has shown remarkable growth over the past three years, climbing approximately 240%, significantly outpacing the PHLX Semiconductor Sector index's 27% rise. This growth trajectory is bolstered by a strong performance in the AI sector, where Broadcom's AI revenue surged by 220% in fiscal year 2024, reaching $12.2 billion. The company forecasts a further 65% increase in AI chip revenue for the current quarter, potentially generating $3.8 billion.

The company is bullish on the future of its custom AI accelerators and networking chips, estimating that the addressable market could reach between $60 billion and $90 billion by fiscal 2027. If Broadcom captures a 50% market share in this market, it could nearly triple its previous AI sales, translating to AI revenue of $37.5 billion by 2027, according to wallstreetwaves.com.

In light of these developments, analysts have adjusted their projections favorably for Broadcom. UBS, for instance, upped its price target from $220 to $270, highlighting Broadcom's solid footing in the AI market. This positive outlook positions Broadcom well for continued growth, aligning with the company's strategic focus on expanding its AI capabilities and market presence.

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