Semiconductor specialist Broadcom has experienced a surge in revenue and profit, driven by the growing adoption of artificial intelligence (AI). The company reported a 43% year-over-year revenue increase, with AI-related revenue growing by 280% to comprise 25% of total revenue. Additionally, Broadcom announced a 10 for 1 stock split to make ownership more accessible to investors and employees, further boosting investor sentiment.
Following the strong financial results, Broadcom raised its guidance for the full fiscal year, now expecting revenue of $51 billion and AI-related revenue of more than $11 billion. CEO Hock Tan stated that the AI guidance was likely conservative. The company’s performance led to positive comments from analysts, with Bank of America Analyst Vivek Arya raising his price target for Broadcom shares to $2,150, representing a potential gain of 31% from the current price.
Broadcom’s position in the AI ecosystem, with its custom accelerators and networking solutions favored by top hyperscalers, presents a significant growth opportunity. This, combined with the attractive share price, makes Broadcom shares a buy according to analysts.
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https://www.fool.com/investing/2024/07/02/why-broadcom-stock-surged-21-higher-in-june/
