Despite Speculation of Google's Shift, Analyst Sees Strong Ties and Momentum in Broadcom's Decade-Long Partnership
Portfolio Pulse from Anusuya Lahiri
Truist Securities analyst William Stein reiterated a Buy rating and a $995 price target for Broadcom Inc (AVGO). Despite speculation that AVGO may lose Alphabet Inc (GOOG, GOOGL) as a critical AI computing customer, Stein views this as unlikely. He estimates this potential loss relates to ~55% of AVGO's AI-related revenue, ~11% of total revenue, and ~8% of EPS. Stein remains optimistic about AVGO's fundamentals and themes, including mid-single-digit organic sales growth and double-digit dividend growth.
September 22, 2023 | 7:14 pm
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POSITIVE IMPACT
Broadcom's stock may be positively impacted by the analyst's optimistic outlook and reiterated Buy rating, despite potential risks associated with losing Google as a customer.
The analyst's optimistic outlook and reiterated Buy rating for Broadcom, despite potential risks, could boost investor confidence and positively impact the stock price in the short term.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 100
NEUTRAL IMPACT
Google's stock may not be significantly impacted as the company already designs and develops significant aspects of its Tensor Processing Unit (TPU) internally.
As Google already designs and develops significant aspects of its TPU internally, the potential change in its relationship with Broadcom may not have a significant impact on its stock.
CONFIDENCE 75
IMPORTANCE 50
RELEVANCE 60