Broadcom (AVGO) Gets $420 Price Target as AI Tailwinds Support Multi-Year Growth

Broadcom Inc. (NASDAQ:AVGO) is one of the AI Stocks in Focus on Wall Street. On November 20, Raymond James assumed coverage on the stock with an “Outperform” rating and a price target of $420.00.

Raymond James believes there is upside for several semiconductor stocks, including Nvidia (NVDA), AMD (AMD), and more.

“The AI secular theme has taken the wheel, and the strategy of trading the cycle in semis has moved to the back seat. Each of these companies is impressive in its own way. We are AI bulls yet acknowledge the rich valuations and risk, but these are high-quality compounders with long-term growth rates above their cost of capital. We are in the midst of an unprecedented structural shift in the technology landscape, and semiconductors are foundational elements.”

Particularly for Broadcom, the firm believes AI share gains, margin strength, and underappreciated software cash flows will support long-term upside.

“We resume coverage of Broadcom Inc. (AVGO) with an Outperform rating. The company is a share gainer in the AI complex, providing operators customized alternatives to general-purpose processors.”

Broadcom is seen gaining share in the AI world since hyperscalers may want customized alternatives to general purpose processors.

Even though non-AI semis and software are restricting overall growth, it expects improvement from the non-AI semis and believes that margin and cash generation from software is not fully appreciated.

“Broadcom’s strength in chiplet and systems solutions, coupled with strong networking IP (processing, PHY/Serdes, Optics, CPO) and steady march of advanced packaging/CPO, is a competitive moat to protect shareholder profitability and market share in a rapidly evolving world. Our $420 price target is based on 30x our FY27E EPS.”

Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.

While we acknowledge the potential of AVGO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 AI Stocks in Focus on Wall Street and 10 Hot AI Stocks to Keep on Your Radar Disclosure: None.