J.P. Morgan has issued a strong buy recommendation for Broadcom (AVGO), forecasting a potential 54% stock surge driven by its AI chip advancements. Analyst Harlan Sur emphasized Broadcom’s market leadership and execution capabilities, despite recent rumors of a delay in its next-generation AI accelerator chips with Google.
The firm maintains an ‘overweight’ rating and a $580 price target, indicating confidence in Broadcom’s ability to capitalize on the growing AI market.
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J.P. Morgan is urging clients to become 'aggressive buyers' of Broadcom stock (AVGO), citing the semiconductor and software maker's significant lead in artificial intelligence chips and advanced packaging. The investment bank has assigned an overweight rating to the stock with a $580 price target, suggesting a potential 54% increase from its recent closing price.
Analyst Harlan Sur highlighted Broadcom's substantial dominance, estimated at over 18 months, in chip design, advanced packaging leadership, rapid new design cadence, robust IP portfolio, and a strong track record of execution. He pointed to Broadcom's role in helping Google bring 14 of its most advanced chip designs to market over the past 12 years.
"We think the market continues to underestimate Broadcom's significant dominance/lead (18mos+), chip/advanced packaging design leadership, aggressive cadence of new designs, IP portfolio, and track record of execution," Sur stated in a client note. "We … would be aggressive buyers at current levels."
Despite a recent nearly 7% dip in Broadcom's stock, attributed to rumors of delays in its custom tensor processing unit (TPU) AI accelerator chips developed with Google, J.P. Morgan believes the TPU v9 chips are still on track for a 2028 debut. This progress, according to Sur, is expected to drive significant upside for the stock.
The sentiment from J.P. Morgan aligns with the broader Wall Street consensus, with 47 out of 51 analysts covering Broadcom rating it as a 'buy' or 'strong buy'.
