Stock market today: S&P 500 slips on tech woes, but Nvidia’s rise limits downside
Investing.com - Evercore ISI raised its price target on Broadcom Limited (NASDAQ:AVGO) to $490.00 from $403.00 on Friday, while maintaining an Outperform rating on the stock. This upgrade comes as the semiconductor giant, now valued at $1.92 trillion, continues its impressive 127% price return over the past year.
The price target increase follows Broadcom’s October quarter revenue results, which came in 3% above expectations, and the company’s raised January quarter revenue guidance, which was increased by 4%. InvestingPro data shows Broadcom achieved 28% revenue growth over the last twelve months, with remarkably high gross profit margins of 77.2%.
Evercore ISI noted that Broadcom’s AI revenue accelerated from 74% year-over-year growth to 100% year-over-year growth, with management highlighting visibility for AI revenues to at least double in both fiscal year 2026 and fiscal year 2027.
The firm believes the post-earnings period offers an attractive entry point for investors, with shares falling 5% in after-hours trading despite what Evercore calculates as an implied 2027 price-to-earnings ratio of 29x and a 2026 PEG ratio of 1.1x. InvestingPro analysis indicates Broadcom’s current PEG ratio is just 0.4, suggesting the stock may be undervalued relative to its growth rate, despite trading near its 52-week high.
The new $490 price target reflects 40 times Evercore’s 2027 earnings per share estimate of $13.36, discounted back to present value. With a strong analyst consensus recommendation of 1.3 (Strong Buy), Broadcom remains a prominent player in the semiconductor industry. For deeper insights, InvestingPro offers 20+ additional tips and a comprehensive research report on Broadcom, available among 1,400+ top US equities covered by the platform.
In other recent news, Broadcom has reported better-than-expected financial results, with guidance for the January quarter revenue set at approximately $19.1 billion, surpassing consensus estimates of $17.5 billion. The company disclosed fourth-quarter AI revenues of $6.5 billion, marking a 74% year-over-year growth, and anticipates first-quarter AI revenues to double to $8.2 billion. Several analysts have adjusted their price targets for Broadcom, reflecting optimism in the company’s artificial intelligence growth. BofA Securities raised its price target to $500, maintaining a Buy rating, and increased its fiscal year 2026 and 2027 earnings estimates by 8% each. Mizuho also increased its price target to $450, maintaining an Outperform rating, after the company’s strong quarterly results. KeyBanc echoed a similar sentiment, raising its price target to $500, while Baird adjusted its target to $420, citing AI momentum. Jefferies also raised its price target to $500, highlighting a significant follow-on order from Anthropic and a new multi-year custom XPU program with an unnamed customer.
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