Broadcom AI Revenue Growth May See Upside Potential; Faces Margin Pressure, RBC Says

MT Newswires Live01-16 00:13

Broadcom's (AVGO) artificial intelligence revenue growth is likely to see upside potential to fiscal 2026 estimates due to solid demand at Alphabet's (GOOGL, GOOG) Google and Meta Platforms (META), but the artificial intelligence application-specific integrated circuit business carries a lower margin, RBC Capital Markets said in note emailed Thursday.

The company valuation is around 25% premium to Nvidia (NVDA), making it less attractive given margin pressure and uncertainty around long term sustainability of some large customers, including Anthropic and OpenAI, putting fiscal 2027 consensus at risk, RBC said.

The brokerage said it initiated its sector perform rating on the stock with a price target of $370.

Price: 346.70, Change: +6.81, Percent Change: +2.00

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