Sneha Nahata

Tue, Jun 24, 2025, 8:29 AM4 min read

Broadcom (AVGO) stock has rebounded strongly, gaining 36% in three months. This sharp rebound highlights renewed investor confidence, driven by easing concerns over a potential economic slowdown and Broadcom’s solid financial performance.

The company, which provides semiconductor and infrastructure software solutions, is benefitting from two major catalysts. First, demand for artificial intelligence (AI) chips continues to surge, providing a strong tailwind for its semiconductor division. Second, momentum is building in its VMware business, which Broadcom acquired in November 2023, adding significant strength to its infrastructure software portfolio.

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Wall Street is bullish on Broadcom, with analysts citing strong growth driven by rising demand for AI semiconductors. The company is expected to benefit from solid revenue in this space and improved operating efficiency, which could boost its sales and profits in the coming quarters. Moreover, the highest analyst price target for Broadcom stock tracked by Barchart is $340, suggesting potential upside of around 30% from current levels.

Broadcom has consistently posted robust financial results. In its most recent quarter, the company reported consolidated revenue of $15 billion, a 20% increase from a year ago, primarily driven by its semiconductor business, which has been supercharged by demand for AI-related products.

Semiconductors accounted for 56% of Broadcom’s revenue during the quarter, with $8.4 billion in sales from this segment alone. AI semiconductors generated over $4.4 billion, up 46% year over year. AVGO’s Q2 marked the ninth consecutive quarter of growth in AI-related chip sales, reflecting Broadcom’s expanding dominance in this space. Key product lines such as its Tomahawk switches and Jericho routers are likely to see solid growth as demand for AI infrastructure accelerates.

Moreover, Broadcom recently unveiled its next-generation Tomahawk 6 switch, which significantly reduces latency and power consumption. The new product will likely strengthen Broadcom’s positioning in the AI space.