TLDR
- Mizuho Securities analyst Vijay Rakesh raised Broadcom’s price target to $300 from $250, implying 27% upside potential
- Jim Cramer called AVGO “a horse” and one of his biggest positions, recommending buy even at current levels
- Broadcom’s AI Custom Silicon unit is expected to capture 60-70% of the $60-90 billion market by fiscal 2027
- The company’s software business generates about 50% of total revenue and is described as a “cash cow”
- Wall Street expects Q2 earnings per share to jump 43% to $1.57 when results are announced June 5
Broadcom stock got a big vote of confidence from Wall Street this week. Mizuho Securities analyst Vijay Rakesh lifted his price target on the semiconductor company to $300 from $250. The new target suggests shares could climb 27% from current levels.
Rakesh maintained his “Buy” rating on the stock. He called Broadcom a “Top Pick” for 2025, pointing to several growth drivers that have analysts excited.
The five-star analyst highlighted Broadcom’s growing strength in AI custom silicon. He also praised the company’s strong position in networking and its software business.
Jim Cramer shares Rakesh’s enthusiasm for the stock. When a caller expressed bullish views on Broadcom, Cramer responded with praise.
“Broadcom is good, my friend. It’s one of my biggest positions for my Charitable Trust,” Cramer said. “This stock has been a horse, and I gotta tell you, as far as I’m concerned buy, buy, buy even up here.”
Cramer pointed to Broadcom’s data center exposure as a key reason for his confidence. He said the company is “taking names and taking share” in that space.
The TV host previously highlighted CEO Hock Tan’s leadership when discussing a $10 billion buyback program. Cramer called Tan “one of the greatest CEOs of our era.”
AI Custom Silicon Drives Growth
Rakesh believes the AI Custom Silicon unit will be Broadcom’s “biggest revenue driver” going forward. This division will play a key role in the company’s growth heading into 2026.
Mizuho thinks Broadcom could grab 60% to 70% of the $60 billion to $90 billion market by fiscal 2027. The company’s edge comes from its 3.5D advanced packaging technology.
This packaging helps build faster and more powerful chips. It gives Broadcom a competitive advantage in the custom silicon space.
The AI boom has created huge demand for specialized chips. Broadcom is well-positioned to benefit from this trend with its custom solutions.
Networking and Software Strength
Beyond AI chips, Broadcom leads in networking with its top Ethernet switch lines. These include StrataXGS, DNS Tomahawk5/6, and Jericho products.
Rakesh highlighted the company’s roadmap toward co-packaged optics technology. CPO can improve energy use and speed by combining optical and electrical parts in one system.
The software business deserves attention too. Rakesh called it a “cash cow” that generates about 50% of total company revenue.
This steady software income provides balance to the more cyclical hardware business. It gives Broadcom predictable cash flows that support growth investments.
The analyst expects Broadcom to produce free cash flow of around $33 billion in fiscal 2025. That’s a massive amount that shows the company’s profit-generating power.
Mizuho raised its estimates for fiscal 2027 by 5% to 10% above consensus. The firm clearly sees accelerating growth ahead for the company.
Broadcom shares have surged 66% over the past year. Strong demand for custom AI chips and networking solutions drove the rally.
Hyperscale customers have been particularly strong buyers of Broadcom’s products. These large cloud providers need specialized chips for their data centers.
The company will report second quarter 2025 earnings on June 5. Wall Street expects earnings per share to jump 43% to $1.57.
Revenue is forecast to climb about 16% to $14.95 billion. These numbers would show continued strong execution by management.
Most analysts remain optimistic about Broadcom’s prospects. They cite the company’s expanding role in AI infrastructure and strong software revenues.
Wall Street has a Strong Buy consensus rating on the stock. The rating is based on 24 Buy recommendations and two Hold ratings from recent months.
The average price target of $246.32 implies 4.53% upside potential from current levels.
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