Broadcom (NASDAQ:AVGO) is a "long-term EPS compounder, with best-in-class FCF," BofA analysts told investors in a note Wednesday.
The analysts, who have a Buy rating and a $950 price target on the stock, said the firm hosted Broadcom CEO Hock Tan for a keynote address on Day 1 of the BofA Global Technology Conference.
"Management presented a compelling and unique vision of focus on premium compute/networking products, laser-focus on operational efficiency, consistent GM expansion, and best-in-class FCF generation/returns (FCF margins of 50%+ the highest in semiconductor industry)," the analysts said.
"Near-term AVGO is facing some of the same macro (consumer, enterprise) headwinds, but revenue is unlikely to roll over (on track to grow YoY), supported by effective tracking of consumption (close customer relationships), secular AI markets."
The analysts believe that AI can help AVGO drive roughly $47 to $50 or more in EPS by FY24/25E, and they "see 5%-6% upside to long-term numbers of AI revenue targets are achieved."