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Broadcom (NASDAQ:AVGO) was in the spotlight on Friday after the semiconductor and software company reported stronger-than-expected second-quarter results and guidance, leading to much praise from analysts and investors.
Shares fell 2.2% in premarket trading, while other semiconductor stocks, such as Nvidia (NVDA), AMD (AMD) and Marvell (MRVL) moved fractionally.
Lucas Ma of Envision Research, Investing Group Leader for Envision Early Retirement, said he was “particularly optimistic” about Broadcom’s differentiated accelerator products and its customer base. “Most of its customers are hyperscalers with a large internal installed base to potentially deploy AVGO’s next-gen accelerators,” Ma said via email.
Jonathan Weber, Investing Group Leader for Cash Flow Club, said he saw “compelling” growth, thanks to AI data center spending. He also pointed out strength in the infrastructure software business and the continued rise in margins, thanks to operating leverage.
Jefferies analyst Blayne Curtis said the custom silicon business is likely to ramp up in the second half of the year, aided by the next generation of Google’s (GOOG) (GOOGL) tensor process units.
“The ASIC business is still expected to have 3 customers deploying 1M XPU clusters in 2027, but with added upside potential from inference buildouts in 2H26,” Curtis, who has a Buy rating and $300 price target on Broadcom, wrote in a note to clients.
“Performance remained on track through the transition periods, with growth expected to accelerate with the Ironwood TPU (v7p) ramp in 2H. All in, the AI segment is expected to continue growing at the current pace through the rest of FY25 and FY26 (~60% growth, including the Q3 AI guide).”
Morgan Stanley analyst Joseph Moore slightly raised his price target — going to $270 from $260 — and kept his Overweight rating on Broadcom, citing the positive commentary for 2026.
“Company highlights potential to maintain 2025 growth rates in CY26,” Moore wrote in a note to clients.
Moore continued: “We don’t want to be overly literal about a qualitative comment before 2025 is over, but that implies $26-30B in AI revenue, higher than what is in Street models. It seems consistent with the view, expressed six months ago, that there is a $60-90B [serviceable addressable market] in 2027; we certainly need to be high $20B range to get to a strong portion of that [serviceable addressable market] one year later.”