Broadcom Limited (NASDAQ: AVGO) has recently received an increased price target from UBS, reflecting a positive outlook on the company's growth potential in the artificial intelligence (AI) sector.
UBS has raised the price target for Broadcom, indicating confidence in the company's future prospects in the AI sector. This adjustment is based on a comprehensive analysis of Broadcom's Serviceable Addressable Market (SAM) disclosures, with a specific focus on its custom compute and AI networking businesses.
Broadcom has demonstrated strong financial performance, particularly in the AI sector. Over the past twelve months, the company has achieved an impressive revenue growth of 44%. In fiscal year 2024, Broadcom's AI revenues tripled compared to the previous year, and projections for fiscal year 2025 suggest further growth.
Analysts have revised their earnings estimates upward, anticipating significant growth in AI revenue for fiscal years 2026 and 2027. This positive outlook is supported by the company's strategic focus on expanding its customer base, particularly within the hyperscaler segment. Broadcom's AI networking and custom compute segments are expected to be key drivers of future revenue growth.
The raised price target from UBS, along with positive ratings from other analyst firms, reflects confidence in Broadcom's growth trajectory. The company's recent financial performance and optimistic projections for its AI revenue streams position it favorably in the semiconductor industry.