On Friday, an analyst from Baird increased the price target on shares of Broadcom Limited (NASDAQ:AVGO) to $210 from the previous target of $195, while maintaining an Outperform rating on the stock. The adjustment follows Broadcom's announcement of securing two additional custom ASIC customers, which are expected to contribute to the company's revenue before the fiscal year 2027.
The analyst highlighted Broadcom's strategic focus on artificial intelligence (AI), noting the company's AI serviceable available market (SAM) suggests an approximate 60% compound annual growth rate (CAGR) over the next three years. This projection supports the belief that AI will be a crucial driver of Broadcom's growth in the medium term.
Broadcom's recent completion of the VMWare integration is also seen as a positive development. The integration is anticipated to contribute to ongoing revenue growth and has resulted in an adjusted EBITDA that surpasses initial expectations.
The reinforcement of Broadcom's growth strategy through its AI initiatives and the successful integration of VMWare positions the company favorably, according to the analyst's remarks. The updated price target reflects confidence in Broadcom's future performance, driven by these key factors.
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