Broadcom CEO Hock Tan.
Lucas Jackson | Reuters
After the market cap topped $1 trillion on Friday and soared 24% for its best day ever, Broadcom’s The stock rose another 9% on Monday, driven by Wall Street raising its price targets.
The latest rally was fueled by Broadcom’s better-than-expected earnings report late Thursday and an upbeat first-quarter outlook. Broadcom, which sells semiconductors and infrastructure software, has seen a surge in demand from the boom in generative artificial intelligence and reported a 220% increase in AI revenue this year to $12.2 billion.
Goldman Sachs Analysts who recommend buying Broadcom stock raised their 12-month target to $240 from $190, citing more large customers for custom chips. They also pointed to management’s execution following last year’s $61 billion acquisition of VMware.
“We are now more confident in the company’s future revenue and earnings growth prospects,” analysts wrote in a Dec. 15 note.
Barclays raised its price target on the stock to $205 from $200, and Truist raised its price target to $260 from $245.
Broadcom shares have risen nearly 120% this year, reaching a high of $245.29 on Monday. NVIDIAThe company has become a major beneficiary of the artificial intelligence boom due to the popularity of graphics processing units (GPUs), with its stock price rising more than 165% this year and its market capitalization reaching $3.2 trillion. The Nasdaq rose 34%.
Broadcom calls its custom AI accelerator XPU, which is different from the GPU sold by Nvidia. Broadcom said it doubled XPU shipments to “our three hyperscale customers” this quarter. The company did not disclose the names of its customers, but analysts said the three customers were Meta, Alphabet and TikTok parent company ByteDance.
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