KeyBanc raises Broadcom stock price target on strong AI outlook
Investing.com
Published Jun 06, 2025 05:35AM ET
On Friday, KeyBanc analysts increased the price target for Broadcom Limited (NASDAQ: NASDAQ:AVGO) stock to $315 from a previous target of $275, maintaining an Overweight rating. This adjustment follows Broadcom's second-quarter results for fiscal 2025, which showed solid performance and mixed guidance for the third quarter. According to InvestingPro data, the stock is trading near its 52-week high of $265.43, with analysts maintaining a strong bullish consensus.
The company's revenue growth was driven by its Infrastructure Software segment, particularly due to VMware. The Semiconductor and AI Semiconductor revenues were reported at $4.4 billion, aligning with expectations. AI Networking revenue increased by 170% year-over-year, while AI ASICs also showed significant growth. InvestingPro data reveals impressive financial metrics, including a 76.26% gross profit margin and overall revenue growth of 40.3% in the last twelve months.
Broadcom announced that its AI revenues are projected to grow by 60% in fiscal year 2025, compared to a previous estimate of 45%. The company expects this growth rate to continue into fiscal year 2026. This projection is supported by the expansion of AI ASIC customers, including META (NASDAQ:META) and ByteDance, alongside existing clients like Google (NASDAQ:GOOGL).
The analysts expressed optimism regarding Broadcom's AI business prospects, leading to the revised estimates and price target. They reiterated their Overweight rating, reflecting confidence in the company's future performance.
In other recent news, Broadcom Inc. reported impressive financial results for the second quarter of 2025, with earnings per share (EPS) of $1.58, narrowly surpassing the forecast of $1.57. The company achieved a record revenue of $15 billion, slightly above the anticipated $14.95 billion, marking a 20% year-on-year increase. Broadcom has also provided guidance for the third fiscal quarter, projecting revenue of $15.8 billion, reflecting a 21% year-on-year growth. The company's AI semiconductor revenue is expected to grow by 60% year-on-year, continuing its momentum in AI technologies. Deutsche Bank analysts have raised Broadcom's stock price target to $270, citing growth in the AI segment, while HSBC increased their price target to $240, acknowledging Broadcom's third-quarter revenue guidance. Both firms maintain a positive outlook on the company's financial trajectory, highlighting the strength in AI and infrastructure software segments. Broadcom's management remains confident in its dominance in ethernet connectivity despite competition, with expectations for continued growth into fiscal 2026.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.