Benchmark Boosts Broadcom’s (AVGO) Price Target Amid AI Chip Growth

Broadcom Inc. (NASDAQ:AVGO) ranks among the best AI stocks to bargain according to analysts. Citing robust improvement successful the AI semiconductor industry, Benchmark accrued its terms people for Broadcom Inc. (NASDAQ:AVGO) from $385 to $485 connected December 12, retaining a Buy standing connected the company’s shares. According to Broadcom Inc. (NASDAQ:AVGO), its AI semiconductor part achieved $6.5 cardinal successful Q4, improving 76% year-over-year and 25% sequentially.

The institution reported $21 cardinal successful orders from Anthropic implicit the past 2 quarters, portion its six-quarter AI bid backlog climbed to $73 billion. Broadcom’s database of clients present includes giants similar Meta, ByteDance, and Google, arsenic good arsenic an further declaration with OpenAI to proviso $1 cardinal successful chips by precocious 2026.

According to Reuters, portion Broadcom’s backlog is scheduled to vessel implicit the adjacent 18 months, CFO Kirsten Spears warned that margins could fall. She stated that the Q1 consolidated gross borderline is apt to autumn astir 100 ground points sequentially, owing to a higher percent of AI revenue.

Analysts quoted by Reuters stress 2 main risks for the company, including its excessive attraction connected conscionable 5 AI customers, and weaker margins connected AI systems, which are apt to relationship for a greater stock of the full gross successful coming quarters, notably successful the 2nd fractional of fiscal twelvemonth 2026.

Broadcom Inc. (NASDAQ:AVGO) designs, develops, and supplies assorted semiconductor devices and infrastructure bundle solutions worldwide. The institution operates successful 2 segments: Semiconductor Solutions and Infrastructure Software.

While we admit the imaginable of AVGO arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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Disclosure: None. This nonfiction is primitively published at Insider Monkey.