Piper Sandler Analyst Raises Broadcom (AVGO) Price Target to $2,000

Piper Sandler's Harsh Kumar raised their price target on Broadcom (NASDAQ: AVGO) by 21.2% from $1,650 to $2,000 on June 13, 2024. The analyst maintained their Strong Buy rating on the stock.

Broadcom, a global semiconductor company, recently released its Q2 2024 earnings results. The company reported better-than-expected figures, including an EPS of $10.96, which beat the Zacks Consensus Estimate of $10.79 and Q2 2023's $10.32 by 6.2%. Revenue for the quarter stood at $12.49 billion, surpassing the Zacks Consensus Estimate by 3.71% and showing a significant increase of 43% compared to Q2 2023's $8.73 billion. Additionally, Broadcom's EBITDA rose by 30.7% year-over-year, reaching $7.43 billion.

President and CEO Hock Tan attributed Broadcom's strong Q2 results to the demand for AI products and the adoption of the VMware software stack by enterprises. Revenue from AI products reached a record $3.1 billion during the quarter, while infrastructure software revenue accelerated with the increasing adoption of the VMware software stack.

CFO Kirsten Spears highlighted the company's consolidated revenue growth of 43% year-over-year, reaching $12.5 billion, including contributions from VMware. Adjusted EBITDA also saw a significant increase of 31% year-over-year, amounting to $7.4 billion. Free cash flow, excluding restructuring and integration costs, was $5.3 billion, up 18% compared to the previous year.

In addition to the positive earnings report, Broadcom announced a 10-for-1 stock split of its common stock. The decision aims to make ownership of Broadcom stock more accessible to investors and employees.

Following the release of the Q2 2024 earnings report, several other analysts updated their ratings and price targets for Broadcom. Wells Fargo's Aaron Rakers raised their price target by 18.9%, from $1,430 to $1,700, while maintaining a Hold rating on the stock. Goldman Sachs's Toshiya Hari increased their price target by 19.4%, from $1,550 to $1,850, and maintained a Strong Buy rating. Oppenheimer's Rick Schafer raised their price target by 33.3%, from $1,500 to $2,000, and maintained a Buy rating.

Based on the consensus among top-rated analysts, 95.5% of them currently rate AVGO as a Strong Buy or Buy, with 4.5% considering it a Hold. No analysts recommend selling the stock.

Looking ahead, analysts forecast that Broadcom's upcoming year will deliver earnings per share (EPS) of $30.81. If these predictions hold true, AVGO's next yearly EPS will see a 28.5% increase on a year-over-year basis.

Broadcom's stock price has shown significant growth since the Q2 earnings report, with a 12.3% increase since June 12, 2024. Year-over-year, the stock has surged by 97.3%, outperforming the S&P 500, which has risen by 24.4% during the same period.

Piper Sandler analyst Harsh Kumar, the analyst who raised the price target on Broadcom, is ranked in the top 1% by WallStreetZen among 4,602 Wall Street analysts. Kumar specializes in the Technology and Healthcare sectors and boasts an average return of 29.6% and a 66.7% win rate.

Broadcom Inc., headquartered in San Jose, California, designs, develops, and supplies various semiconductor devices worldwide. The company operates in two segments: Semiconductor Solutions and Infrastructure Software. Its products find application in a wide range of industries, including enterprise and data center networking, home connectivity, telecommunication equipment, smartphones, and electronic displays.

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