<\/p>\n
Broadcom (AVGO) has gained 26% since April 6, when it closed at $314.43, according to Yahoo Finance at the time of writing, Thursday afternoon, April 16. Meanwhile, the SPDR S&P 500 index (SPY) is up 6% in the same period.<\/p>\n
What has led to Broadcom outpacing the S&P 500 by roughly 20%?<\/p>\n
The company reported very strong earnings in March, and Morgan Stanley analysts reset their price target for AVGO stock.<\/p>\n
However, concerns about the company\u2019s revenue streams caused the stock to tumble in March. Broadcom finally reassured investors by extending its partnerships with Google and Anthropic on April 6.<\/p>\n
Bank of America analysts reacted positively to that deal.<\/p>\n
While that move was enough to lift the stock, Broadcom has secured another important partnership, this time with Meta (META).<\/p>\n
Broadcom chips are the backbone of Meta’s AI data centers.<\/p>\n
Shutterstock<\/p>\n
Broadcom extends partnership with Meta<\/p>\n
Broadcom and Meta (META) entered into a multi-year, multi-generation partnership. Extending their current partnership, Broadcom will deliver technology supporting Meta Training and Inference Accelerator (MTIA) chips, with plans to extend through 2029.<\/p>\n
MTIA chips are custom AI accelerators designed to deliver the most efficient architecture for Meta\u2019s specific workload needs.<\/p>\n
The initial commitment exceeds 1GW. More gigawatts are expected to follow in phases.<\/p>\n
\u201cMeta is partnering with Broadcom across chip design, packaging, and networking to build out the massive computing foundation we need to deliver personal superintelligence to billions of people,\u201d stated Meta founder and CEO Mark Zuckerberg in a press release.<\/p>\n
More Tech Stocks:<\/p>\n
Bank of America resets Nvidia stock forecast after meeting with CFOGoldman Sachs resets Marvell price target after earningsBank of America resets Amazon stock forecast<\/p>\n
Broadcom is also delivering its Ethernet networking solutions to address scale-up, scale-out, and scale-across requirements of MTIA clusters. Along with hardware, these partnerships will also focus on continuous system-level optimization and research and development.<\/p>\n
Given the scale of this expanded partnership, Broadcom CEO Hock Tan will transition off Meta\u2019s Board of Directors and into an advisory role for Meta.<\/p>\n
Goldman Sachs says AVGO reinforced its advantage in custom silicon and AI networking<\/p>\n
Goldman Sachs analyst James Schneider and his team updated their opinion on Broadcom stock following the extended partnership.<\/p>\n
The team said they believe this announcement further reinforces the importance of Broadcom\u2019s role in the ongoing AI infrastructure buildout through its industry-leading XPU platform and networking capabilities.They added that multi-year strategic partnerships with leading US hyperscalers provide visibility into the company\u2019s long-term AI revenue growth.<\/p>\n
Related: Nvidia invests $2 billion in under-the-radar tech giant<\/p>\n
Schneider noted that the partnership with Meta, along with partnerships with Google and Anthropic, demonstrates Broadcom\u2019s increasing traction with its XPU platform and networking solutions across major US hyperscalers.<\/p>\n
He said it provides a broader, more diverse customer base with high exposure for Broadcom across both enterprise and consumer AI applications.<\/p>\n
Analysts believe that these factors will drive the stock higher over the next 12 months:Increasing traction for Broadcom\u2019s XPU platform across major hyperscalersIndustry-leading networking capabilitiesUpside to estimates, with the team\u2019s fiscal 2027 and 2028 EPS estimates being
approximately 14% above Wall Street<\/p>\n
In a research note shared with me, Schneider reiterated a buy rating for Broadcom and the target price of $480, based on a 30 multiple of his normalized EPS estimate of $16.<\/p>\n
Key downside risks include:Slowdown in AI infrastructure spending,Share loss in the custom compute franchise,Persistent inventory digestion in non-AI.<\/p>\n
Related: Bank of America resets Broadcom stock forecast<\/p>\n
#Goldman #Sachs #resets #Broadcom #stock #forecast<\/p>\n","protected":false},"excerpt":{"rendered":"
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