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Investing.com - Benchmark maintained a Buy rating and $485 price target on Broadcom (NASDAQ:AVGO) stock following an announcement regarding extended AI engagement with Meta.
Analyst Cody Acree said the announcement increases confidence that Broadcom can exceed its prior target of significantly more than $100 billion of AI semiconductor revenue in fiscal year 2027. The semiconductor giant posted revenue of $68.28 billion in the last twelve months with an impressive gross profit margin of 76.73%, reflecting strong pricing power in its AI chip business. The extension adds formal duration and deployment visibility to one of the company’s largest custom XPU programs.
Benchmark noted that Broadcom’s custom XPU franchise now spans six customers. The firm expects further upside from Google’s next-generation TPU roadmap and Meta’s MTIA roadmap. As a prominent player in the Semiconductors & Semiconductor Equipment industry, according to InvestingPro, the company has delivered a remarkable 114.51% return over the past year, though current analysis suggests the stock may be overvalued relative to its Fair Value.
Anthropic is expected to ramp from 1 gigawatt this year to more than 3 gigawatts in 2027. OpenAI is expected to deploy its first-generation XPU in 2027 at more than 1 gigawatt of compute capacity.
The announcement involves Meta and Broadcom extending AI engagement to 2029, with deployment exceeding 1 gigawatt.
In other recent news, Broadcom Inc. announced the launch of VMware Tanzu Platform agent foundations at the AI in Finance Summit. This new runtime environment is designed for autonomous AI applications, providing governance and operational controls for AI agents. Additionally, Broadcom has entered into a multi-year partnership with Meta Platforms to develop AI compute accelerator chips through 2029. This collaboration involves the development of Meta Training and Inference Accelerator (MTIA) chips, with an initial deployment exceeding 1 gigawatt of computing capacity.
Bernstein SocGen Group has maintained an Outperform rating and a $525 price target for Broadcom following this partnership with Meta. Similarly, Goldman Sachs has reiterated a Conviction Buy rating with a $480 price target, highlighting the strategic significance of this collaboration. The partnership represents a multi-gigawatt rollout plan between Broadcom and Meta, marking an important phase in their ongoing collaboration. These developments reflect Broadcom’s continued engagement in significant strategic partnerships and technological advancements.
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