Meta Platforms Sees Institutional Investment Surge Amid Analyst Upgrades
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 19 2024
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Should l Buy AVGO?
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Analyst Views on AVGO
Wall Street analysts forecast AVGO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AVGO is 462.58 USD with a low forecast of 390.00 USD and a high forecast of 525.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
28 Analyst Rating
27 Buy
1 Hold
0 Sell
Strong Buy
Current: 310.510
Low
390.00
Averages
462.58
High
525.00
Current: 310.510
Low
390.00
Averages
462.58
High
525.00
About AVGO
Broadcom Inc. is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software and security solutions. The Company operates through two segments: semiconductor solutions and infrastructure software. Its semiconductor solutions segment includes all of its product lines and intellectual property (IP) licensing. It provides a variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications. Its infrastructure software segment includes its private and hybrid cloud, application development and delivery, software-defined edge, application networking and security, mainframe, distributed and cybersecurity solutions, and its FC SAN business. It provides a portfolio of software solutions that enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Revenue Growth Expectations: The company anticipates its AI semiconductor revenue will double year-over-year in Q1, making it the fastest-growing entity in the AI computing sector, showcasing its strong market share acquisition capabilities.
- Overall Financial Outlook: Despite AI semiconductor revenue comprising less than half of its total, Wall Street analysts project a 52% revenue growth for Broadcom in fiscal 2026 and a 39% increase in 2027, propelling the company towards a potential $3 trillion market cap.
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- Capex Driving Price Increases: Big tech is expected to spend over $500 billion on AI infrastructure this year, leading to shortages in high-bandwidth memory (HBM) solutions, with TrendForce research suggesting DRAM and NAND chip prices could soar by 60% and 38%, respectively, in Q1 alone.
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- Market Share Battle: Broadcom is partnering with AI hyperscalers to design custom AI chips, expecting to secure significant orders in 2026 and 2027, thereby challenging Nvidia's dominance in a competitive market.
- Revenue Growth Expectations: The company anticipates its AI semiconductor revenue will double year-over-year in Q1, making it the fastest-growing entity in the AI computing sector, showcasing its strong market share acquisition capabilities.
- Overall Financial Outlook: Despite AI semiconductor revenue comprising less than half of its total, Wall Street analysts project a 52% revenue growth for Broadcom in fiscal 2026 and a 39% increase in 2027, propelling the company towards a potential $3 trillion market cap.
- Investment Opportunity: Broadcom's stock could double in the next two years, making it an attractive option for investors, even though it was not included in the Motley Fool Stock Advisor's list of top recommended stocks.
See More
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- Election Outcome: Japan's ruling Liberal Democratic Party (LDP) secured a supermajority in the recent elections, allowing Prime Minister Sanae Takaichi to return to power, which indicates strong voter support for her administration.
- Economic Policy Initiatives: Takaichi's agenda includes increasing defense spending and suspending certain food-related taxes, which is expected to stimulate economic growth and enhance consumer confidence, positively impacting Japan's economy.
- Market Reaction: Following the election results, Japanese stocks reached a record high, with the yen strengthening to 156.88 per dollar, reflecting renewed investor confidence in the government's future policies and economic direction.
- International Market Trends: U.S. markets also showed strong performance post-election, with major index futures rising, indicating global investor interest in tech stocks, particularly in the AI sector, further contributing to the overall market recovery.
See More
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- Big Tech Valuation Loss: According to FactSet data, Big Tech has collectively lost over $1 trillion in valuation over the past week, with Amazon alone shedding more than $300 billion, indicating a significant decline in market confidence that may lead investors to reassess the future growth potential of the tech sector.
- US-India Trade Deal Framework: The U.S. and India released a framework for a trade deal, although India showed resistance to U.S. demands for opening its agricultural market to imports, while Trump removed a 25% tariff on India for purchasing Russian oil, which could impact trade relations and future economic cooperation between the two nations.
- Luckin Coffee's High-End Store Launch: China's Luckin Coffee opened its first high-end store in Shenzhen, marking a shift from its original budget coffee kiosk strategy to directly compete with Starbucks, a strategic move that could attract a more affluent consumer base and enhance brand image and market share.
- Dow Jones Surpasses 50,000: The Dow Jones Industrial Average closed above 50,000 for the first time on Friday, driven by a rebound in tech stocks, a milestone that not only reflects a strong market recovery but may also attract more investors to focus on the long-term growth potential of the U.S. stock market.
See More
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- Massive Market Potential: According to Bloomberg Intelligence, the total addressable market for AI accelerators is expected to grow at a 16% CAGR, reaching $604 billion by 2033, providing strong market support for Micron Technology.
- Surging Memory Demand: Micron dominates in high-bandwidth memory (HBM), dynamic random access memory (DRAM), and NAND chips, with forecasts indicating the memory market could grow to $100 billion by 2028, highlighting the accelerating demand for memory chips.
- Capital Expenditure Driving Price Increases: With big tech expected to spend over $500 billion on AI infrastructure, shortages in HBM solutions are anticipated, with TrendForce research suggesting DRAM and NAND prices could soar by 60% and 38%, respectively, in Q1 alone.
- Attractive Valuation: Micron currently trades at a forward P/E ratio of 12, significantly lower than other leaders in the AI chip market, and combined with the multi-year supercycle for HBM chips, this indicates strong investment potential for Micron stock.
See More
Micron Technology Emerges as a Contender in AI Chip Market
- Massive Market Potential: According to Bloomberg Intelligence, the total addressable market for AI accelerators is expected to grow at a 16% CAGR through 2033, reaching $604 billion, providing strong market support for Micron Technology.
- Surging Memory Demand: Micron's management forecasts that the memory market will grow from $35 billion in 2025 to $100 billion by 2028, indicating a much faster acceleration in demand for memory chips compared to the GPU market.
- Capex Driving Price Increases: Big tech is expected to spend over $500 billion on AI infrastructure this year, leading to shortages in high-bandwidth memory (HBM) solutions, with TrendForce research suggesting DRAM and NAND chip prices could soar by 60% and 38%, respectively, in Q1 alone.
- Significant Valuation Appeal: Micron currently trades at a forward P/E ratio of 12, significantly lower than other AI chip leaders, and combined with strong market trends, this gives investors confidence in its future performance.
See More
Microsoft and Broadcom: Winners in AI Investment
- Microsoft Cloud Growth: Microsoft (MSFT) reported a 26% year-over-year increase in cloud revenue last quarter, indicating that AI services are becoming a key growth driver, which is expected to further enhance overall revenue growth.
- Data Center Investments: Microsoft is investing in data centers and AI chips, such as the Maia 200 custom AI accelerator, to meet the growing demand for AI cloud services, with Azure platform revenue up 39% year-over-year, reflecting strong market demand.
- Broadcom's Strong Performance: Broadcom (AVGO) posted a 39% year-over-year increase in adjusted net income last quarter, reaching $9.7 billion, with total revenue growing 28%, primarily driven by surging demand for AI accelerators, showcasing its industry leadership.
- Shareholder Return Program: Broadcom paid $2.8 billion in cash dividends in the fourth quarter and has consistently increased dividends over the past decade, with a current yield of 0.73%, reflecting its strong profitability and commitment to shareholders.
See More
