Hock Tan, chief government officer of Broadcom
Martin H. Simon | Bloomberg | Getty Pictures
Broadcom shares jumped about 9% Monday after Citigroup resumed its protection of the inventory with a “purchase” score and up to date its worth goal to $1,100. Shares are at the moment buying and selling round $1,034.
Citigroup mentioned it resumed its protection of the semiconductor and software program firm in a be aware to traders Monday morning, citing “power within the core enterprise and accretion from the VMware acquisition.” Broadcom purchased VMware in November in an effort to bolster its cloud know-how infrastructure that it sells to different companies.
Broadcom is one in every of many firms trying to revenue off the AI growth, and has teamed up with firms like Google and Comcast to design and construct chips and different infrastructure for sure AI functions, together with Google’s customized tensor processing unit. Nonetheless, it is not aggressive with Nvidia in offering the GPUs used to coach cutting-edge generative AI fashions like people who energy OpenAI’s GPT.
Citigroup’s bullishness is essentially as a result of it believes Broadcom is well-positioned to earn cash from the AI growth.
“We count on gross sales from AI infrastructure to double from $4 billion in F23 (11% of F23 gross sales) to over $8 billion in F24 (17% in F24 gross sales),” the analysts wrote.
Broadcom reported stable earnings for its fiscal fourth quarter final Thursday which gave its shares a 2.4% enhance to $944.30 at Friday’s market shut.
Michael Bloom contributed to this report.
