June 4 - Broadcom (AVGO, Financial) shares climbed more than 3% on Tuesday, touching a new all-time high after the chipmaker started shipping its next-generation Tomahawk 6 switch chips.
The company described the chip as its most advanced to date, designed to enhance data center speed and power efficiency, features seen as increasingly vital for artificial intelligence applications. Tomahawk 6 is said to deliver double the bandwidth of existing Ethernet switches, with early feedback pointing to strong industry interest.
Wall Street appeared to welcome the update ahead of Broadcom's fiscal second-quarter results set for release on June 5. Analysts polled by FactSet expect earnings of $1.57 per share on revenue near $15 billion.
Citi analyst Christopher Danely, who recently boosted his price target on Broadcom to $276 from $210, said the chip could set a new standard for AI infrastructure performance.
The announcement comes amid a broader rally in semiconductor stocks, driven by accelerating investment in AI hardware and cloud infrastructure.
Is AVGO Stock a Buy?
Based on the one year price targets offered by 36 analysts, the average target price for Broadcom Inc is $243.29 with a high estimate of $301.15 and a low estimate of $171.60. The average target implies a downside of -5.28% from the current price of $256.85.
Based on GuruFocus estimates, the estimated GF Value for Broadcom Inc in one year is $150.22, suggesting a downside of -41.51% from the current price of $256.85. 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. For deeper insights, visit the Forecast page.
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