Mizuho has increased its price target for Broadcom (AVGO, Financial) from $250 to $300, while maintaining an Outperform rating on its shares. The firm identifies Broadcom as a leading choice for 2025, driven by promising developments in custom silicon for artificial intelligence. Mizuho anticipates significant progress for Broadcom by 2026, attributing its confidence to expected growth in AI-related technologies.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 35 analysts, the average target price for Broadcom Inc (AVGO, Financial) is $236.46 with a high estimate of $300.00 and a low estimate of $171.60. The average target implies an upside of 0.34% from the current price of $235.65. More detailed estimate data can be found on the Broadcom Inc (AVGO) Forecast page.
Based on the consensus recommendation from 41 brokerage firms, Broadcom Inc's (AVGO, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Broadcom Inc (AVGO, Financial) in one year is $148.05, suggesting a downside of 37.17% from the current price of $235.65. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Broadcom Inc (AVGO) Summary page.
AVGO Key Business Developments
Release Date: March 06, 2025
- Total Revenue: $19 billion, up 25% year on year.
- Adjusted EBITDA: $10.1 billion, up 41% year on year.
- Semiconductor Revenue: $8.2 billion, up 11% year on year.
- AI Revenue: $4.1 billion, up 77% year on year.
- Infrastructure Software Revenue: $6.7 billion, up 47% year on year.
- Gross Margin: 79.1% of revenue.
- Operating Income: $9.8 billion, up 44% year on year.
- Operating Margin: 66% of revenue.
- Free Cash Flow: $6 billion, representing 40% of revenue.
- Capital Expenditures: $100 million.
- Cash and Debt: $9.3 billion in cash and $68.8 billion in gross principal debt.
- Dividends Paid: $2.8 billion in cash dividends.
- Share Repurchase: $2 billion to repurchase 8.7 million shares.
- Q2 Revenue Guidance: $14.9 billion, up 19% year on year.
- Q2 AI Revenue Guidance: $4.4 billion, up 44% year on year.
- Q2 Infrastructure Software Revenue Guidance: $6.5 billion, up 23% year on year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Broadcom Inc (AVGO, Financial) reported a record total revenue of $19 billion for fiscal Q1 2025, up 25% year on year.
- AI revenue reached $4.1 billion, up 77% year on year, surpassing the guidance of $3.8 billion.
- The company is making significant R&D investments in AI, including the development of the industry's first 2-nanometer AI XPU.
- Infrastructure software revenue grew by 47% year on year, driven by the integration of VMware and the shift to subscription-based models.
- Broadcom Inc (AVGO) is expanding its customer base, with four additional hyperscalers engaged in developing custom AI accelerators.
Negative Points
- Non-AI semiconductor revenue was down 9% sequentially due to a seasonal decline in wireless.
- Enterprise networking remains flat as customers work through channel inventory.
- Industrial sales were down double digits in Q1 and are expected to decline further in Q2.
- Free cash flow as a percentage of revenue is impacted by cash interest expenses and cash taxes.
- Concerns about geopolitical tensions and potential regulatory impacts on AI diffusion rules could pose risks to future operations.
