Naughty Flicks

Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenuBroadcom is likely to rally, particularly as investors seem to move past concerns that the company could eventually lose its long-standing partnership with Google , according to Macquarie Equity Research. The research firm upgraded the semiconductor stock to outperform from neutral. It also raised its price target to $490 from $437, implying 33% upside from Wednesday’s close. “Google insourcing risk has played out and seems priced in after the July Correction,” analyst Arthur Lai said Thursday in a note to clients. Broadcom has worked with Google for several years, designing and supplying custom Tensor Processing Units for the hyperscaler. However, investors have raised concerns about the longevity of that partnership, particularly as Google strikes deals with other semiconductor firms such as Marvell Technology and explores using in-house chips for its artificial intelligence-linked initiatives. Those fears have contributed to Broadcom’s negative price action as of late, with shares losing 23% over the past three months. The stock also shed nearly 4% in extended trading on Thursday, even after the company reported better-than-expected results for its fiscal third quarter and a positive forecast for its next fiscal year. AVGO 3M mountain Broadcom is down 23% over the past three months. There is a lot to like about the chipmaker beyond its partnership with Google, per Macquarie Equity Research. A “better-than-expected AI capex plan, new customer win on AI accelerators [and] market share gain/loss in AI [Application-Specific Integrated Circuit, or ASIC] projects,” could all serve as catalysts for the stock in the near future, Lai wrote. The analyst’s call falls in line with consensus on the Street. Of the 51 shops covering Broadcom, 47 have a buy or strong buy on the stock, LSEG data shows.Read More