Broadcom stock nabbed a price-target hike Thursday from a Wall Street analyst who sees the chipmaker and infrastructure software provider continuing to gain from the artificial intelligence trend.
Rosenblatt Securities analyst Hans Mosesmann reiterated his buy rating on Broadcom stock and upped his 12-month price target to 2,400 from 1,640. His move comes just days before Broadcom stock undergoes a 10-for-1 stock split effective Monday.
However, on the stock market today, Broadcom stock slid 2.2% to close at 1,705.95.
In a client note, Mosesmann said he sees upside to the company's recently raised sales target for fiscal 2024 of $51 billion, driven by AI chip sales and better integration of recent acquisition VMware.
Broadcom makes custom AI workload processors called application-specific integrated circuits, or ASICs. It also sells networking and switching chips for data centers.
'Battle Of The Titans': Broadcom Vs. Nvidia
Broadcom's ASICs compete with Nvidia graphics processing units for AI data center business.
"Investors continue to be keen on the competitive dynamic between Broadcom's custom ASICs and Nvidia GPUs, which is, in our view, an apples-to-oranges comparison as we believe that both will thrive," Mosesmann said.
He added, "However, from a cloud platform perspective, the competitive AI dynamic is clearly a battle of the titans with Broadcom's 'open' standards (custom/merchant XPU, Ethernet, PCIe, etc.) vs. Nvidia's mixed closed/open approach (proprietary CUDA GPU-centric, both Infiniband/Ethernet, and NVLink connectivity)."
Broadcom's approach is getting support from hyperscale cloud computing firms, network equipment producers and chipmaker AMD, Mosesmann said.
Broadcom Stock Is A Recent Breakout
On May 15, Broadcom stock flirted with a buy point of 1,438.17 from a 10-week consolidation pattern, according to IBD MarketSurge charts. It climbed as high as 1,438.95 that day but ended the regular session at 1,436.17.
Broadcom stock closed in the buy zone on June 10, two days before the company's beat-and-raise earnings report for its fiscal second quarter. It notched an all-time high of 1,851.62 on June 18.
Further, Broadcom is on three IBD stock lists: IBD 50, Big Cap 20 and Tech Leaders.
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