Melius Research Lifts Broadcom (AVGO) PT, Keeps Buy Rating

On May 28, Melius Research raised its price target on Broadcom Inc. (NASDAQ:AVGO) from $198 to $238, while keeping its Buy rating on the stock. The stock has surged more than 70% in the past year, however, the firm still sees accelerating sales for the company.

Broadcom Inc. (NASDAQ:AVGO) is expected to benefit from its VMware acquisition and is on track to continue growing its sales of AI Chips, Melius Research analysts said in a research note. The stock has risen 69.51% in a year, the analyst noted that Broadcom Inc. (NASDAQ:AVGO) has materialized better than expected.

The company acquired the VMware business back in 2023. VMware is a market leader in cloud computing. Melius' team said they see the acquisition benefitting Broadcom in accelerating its sales of AI chips, particularly custom AI accelerators and networking chips. The analysts expect a CAGR of 43% for AI chips through 2027.

There is more left in the tank of Broadcom Inc. (NASDAQ:AVGO) as AI customers' success is picking up and the execution remains strong, said Melius Research analysts. The company grew its revenue by 24.71% year-over-year in Q1 2025, with a sharp 315.32% improvement in net income.

While we acknowledge the potential of AVGO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AVGO and that has 100x upside potential, check out our report about the cheapest AI stock.

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