Stock Price & Analysis

Based on the recent data and market analysis, here's my assessment of whether to buy or sell AVGO stock:

Based on strong AI growth prospects and recent analyst upgrades, AVGO appears bullish but may be better to wait for a pullback. The stock is trading near all-time highs at $237.44 with stretched valuations.

Based on the provided data and market analysis, here's the price prediction for AVGO stock in 2025:

Broadcom (AVGO) is expected to reach $300-320 by end of 2025, driven by strong AI chip demand and custom ASIC market expansion. The company's AI revenue is projected to grow from $12.2B in FY2024 to $75B (midpoint) by FY2027, representing an impressive CAGR of 83.1%.

The stock's bullish trajectory is supported by two key factors:

1. Expanding AI Market Leadership: Broadcom has secured partnerships with major hyperscalers including Google, Meta, ByteDance and potentially OpenAI and Apple, demonstrating its dominance in the custom ASIC market.

2. Strong Financial Performance: The company reported robust FQ4'24 results with semiconductor revenues of $8.23B (+12.4% YoY) and infrastructure software revenues of $5.82B (+196.9% YoY), while maintaining high adjusted EBITDA margins of 66%.

However, investors should note that the stock's recent rally to $237 appears overextended compared to its historical valuation metrics, suggesting potential near-term consolidation around $180-220 levels before continuing its upward trajectory.

The S1 support level for AVGO Stock is $222.72 ,The R1 resistant level for AVGO Stock is $245.7.

As of the end of day on 2025-01-24, the price of AVGO Stock was $244.45.

The target price for AVGO Stock according to analyst rating is 235.40, with the highest price target at 265.00 and the lowest at 160.00. Analysts have a Strong Buy rating on AVGO Stock overall.

The market cap of AVGO is $1.1T.

Valuation Analysis: Based on current metrics, AVGO appears overvalued at its current price of $237.90. The stock trades at a forward P/E of 36.6x, significantly higher than its 5-year mean of 19.58x and 10-year mean of 15.73x.

Market Performance & Technical Analysis:

Key Reasons for Overvaluation:

1. The recent AI-driven rally has pushed valuations beyond historical norms, with AVGO gaining over 40% in just the past month.

2. While AVGO's AI opportunities are promising, with potential FY2027 AI SAM of $60-90B, current valuations appear to have priced in much of this future growth.

3. The stock's dividend yield has dropped to 0.94%, well below its 5-year average of 2.53%, indicating stretched valuations.

Analyst Sentiment:

Despite positive analyst coverage with recent price target increases, the current price level shows signs of overextension. Recent analyst actions suggest a median price target of $260, representing only modest upside from current levels.

Conclusion: AVGO is currently overvalued based on historical metrics, stretched valuations relative to growth prospects, compressed dividend yield, and technical indicators showing overbought conditions.

Broadcom Inc. is a global technology company that designs, develops, and supplies a broad range of semiconductor, enterprise software and security solutions. The Company operates through two segments: semiconductor solutions and infrastructure software. The Company's semiconductor solutions segment includes all of its product lines and intellectual property (IP) licensing. It provides semiconductor solutions for managing the movement of data in data center, service provider and enterprise networking applications. Its infrastructure software segment includes its mainframe, distributed and cyber security solutions, and its fiber channel storage area networking (FC SAN) business. It provides a portfolio of software solutions that enables customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms. Its product portfolio serves markets, including cloud, data center, networking, broadband, wireless and enterprise software.

Based on the available data and analysis, here is a projection for Broadcom (AVGO) stock price in 2030:

AVGO's stock price is projected to reach $450-500 by 2030, driven by three key factors:

1. The company's dominant position in custom AI chips market, with management forecasting $60-90 billion in AI revenue potential by 2027, suggesting continued strong growth trajectory through 2030.

2. Broadcom's expanding customer base with "two additional hyperscale customers" selecting its custom AI processors, indicating growing market share in the AI infrastructure space.

3. The company's proven track record of maintaining high profit margins (66% adjusted EBITDA margin guidance) while growing revenues at 15-20% annually, which supports sustainable long-term value creation.

This projection assumes Broadcom maintains its leadership in custom AI accelerators and networking chips while successfully executing its growth strategy in infrastructure software post-VMware acquisition.

AVGO has a total of 20000 employees.