StoneX has reaffirmed its buy recommendation for Broadcom, citing the chipmaker's expanding artificial intelligence business and upwardly revised revenue forecasts for the coming fiscal years.
The brokerage maintained a $545 price target on Broadcom stock, one of the highest among analysts covering the company. Broadcom's shares slipped 1.5% to around $362.25 in after-hours trading following the close at $367.47, a decline of 0.60% on Sept. 2.
StoneX's outlook aligns with a broader consensus among analysts who see Broadcom's AI-driven growth as a key driver of future earnings. Rosenblatt Securities and Cantor Fitzgerald each set price targets of $600, while Morgan Stanley assigned a $505 target based on a 28-times earnings multiple at the midpoint. Raymond James set a $475 target.
Broadcom reported third-quarter revenue of $29.6 billion, a 33% increase from the previous quarter and 32% higher year-over-year, exceeding FactSet estimates by 5%. Net income also surpassed expectations, beating Macquarie's and FactSet's estimates by 4% and 5%, respectively. Gross profit margins remained robust at 75%, down slightly from 76% previously.
The company's market capitalization stands at $1.75 trillion. Analysts highlighted Broadcom's AI revenue guidance of $115 billion for fiscal year 2027, with management projecting AI-focused semiconductor demand to reach $230 billion by fiscal 2028. These figures underscore the scale of the AI opportunity Broadcom is positioned to capture.
StoneX's recommendation follows a pattern of strong performance in AI-related stocks, with companies like Super Micro Computer and AppLovin delivering gains of 185% and 157%, respectively, according to ProPicks AI historical references.
