Broadcom (AVGO) shares rocketed higher Friday, a day after the company's fiscal fourth-quarter results topped expectations, leading several analysts to raise their price targets.
The chipmaker's artificial intelligence (AI) pipeline "remains strong," Citi analysts said Friday, after Broadcom announced a pair of new AI customers on its earnings call. Broadcom didn't name the customers, according to a transcript of the call from AlphaSense, but Citi speculated they could be Apple (AAPL) and ChatGPT-maker OpenAI. Apple is reportedly working with Broadcom to develop its own AI chips, according to reporting by The Information.
Citi reiterated a "buy" rating for the stock and raised its price target to $220 from $205. Shares of Broadcom jumped nearly 20% to $215.92 in early trading Friday, pushing its market capitalization above the $1 trillion level.
Broadcom reported its AI sales more than tripled to $12.2 billion in fiscal 2024, and Bank of America analysts suggested they could reach $30 billion by the end of the 2027 calendar year. The bank maintained its "buy" rating and lifted its price target to $250 from $215.
Mizuho analysts were even more bullish on Broadcom's AI revenue growth, projecting more than $50 billion in AI revenue in fiscal 2027. The firm lifted its price target to $245 from $220 and reiterated an "outperform" rating.