Broadcom Stock Just Hit a New 52-Week High. Should You Buy AVGO Here?

Yahoo

19 hours ago

In a quarter where many tech names tripped over macro headwinds, Broadcom (AVGO) picked up speed and did not look back. As markets stumbled in the second quarter, the semiconductor powerhouse reported a 20% year-over-year (YOY) revenue climb. That's a clear signal that its foothold in artificial intelligence (AI) infrastructure is accelerating.
The fuel behind this momentum is Broadcom's unrivaled networking muscle. Tech titans Amazon (AMZN) and Microsoft (MSFT) are racing to scale their AI ecosystems, and Broadcom's switches sit at the heart of these expansions. These switches have become mission-critical for hyperscalers building next-generation data centers.
More News from Barchart
Dear Google Stock Fans, Mark Your Calendars for July 23
Dear UnitedHealth Stock Fans, Mark Your Calendars for July 29
Peter Thiel Is Betting Big on This Ethereum Treasury Stock. Should You Buy Shares Now?
Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today!
But there is more at play. Nvidia's (NVDA) charge toward a $4 trillion market capitalization has also accelerated AVGO stock's trajectory. Nvidia's GPUs dominate AI model training and have unleashed a flood of data center spending. That wave has carried Broadcom's networking business forward, given how closely investors watch both names as AI bellwethers.
All these forces converged on July 15, when AVGO stock hit a fresh 52-week high of $283.36. That marked a nearly 2% move from the prior day, during a session where the S&P 500 Index ($SPX) lost 0.4% and the Nasdaq 100 Index ($IUXX) ticked up 0.13%.
About Broadcom Stock
Headquartered in Palo Alto, California, Broadcom designs and supplies a wide range of semiconductor solutions, enterprise software, and cybersecurity products. Its $1.3 trillion market cap places it firmly among the largest names in tech. The company's tech powers a vast ecosystem, from telecommunications to smart devices, factory automation, cloud infrastructure, and more.
Over the past 52 weeks, AVGO stock has delivered a 66% return, eclipsing the S&P 500's 10% gain and the Nasdaq 100's 12% uptick. And the stock has not slowed down. In the last three months, AVGO has soared 61%, putting the S&P 500's 19% return and Nasdaq's 25% gain during the same stretch in the rearview.
The stock trades at forward earnings of 50 times and forward sales of 25 times, levels well above the sector average. This premium pricing reflects strong investor conviction in Broadcom's ability to scale its growth and protect margins.
Add to that a dependable forward annual dividend of $2.30 per share, yielding 0.82%, and you get a compelling income-growth combination. The company has raised its dividend for 14 consecutive years. Most recently, Broadcom paid $0.59 per share on June 30 to shareholders of record as of June 20.
Broadcom Surpasses Q2 Earnings
On June 5, Broadcom posted its fiscal Q2 2025 earnings, surpassing analyst expectations. Revenue reached $15 billion, marking a 20% increase from the prior year and slightly ahead of Wall Street's $14.95 billion estimate. The pace of growth was powered by two key engines: continued demand for AI-driven semiconductor solutions and solid contributions from VMware.
For the period, adjusted EBITDA hit $10 billion, climbing 35% YOY. Non-GAAP net income came in at $7.8 billion, up 44% from the comparable period. Non-GAAP EPS grew to $1.58 as well, exceeding expectations by a thin but meaningful margin, with consensus pinned at $1.57.
Free cash flow stood out as a highlight, rising sharply to $6.4 billion, a 44% jump from a year ago. By quarter-end, Broadcom's cash and equivalents totaled $9.47 billion, giving the company both stability and flexibility heading into the back half of the year.
Following the earnings beat, Broadcom has since announced the launch of its Tomahawk Ultra Ethernet switch. This product, engineered for high-performance computing and AI workloads, further cements its position in next-gen infrastructure.
Management's guidance reflects confidence rooted in fundamentals. Revenue for Q3 2025 is projected at approximately $15.8 billion, a 21% increase YOY. AI semiconductor revenue alone is expected to touch $5.1 billion, marking 10 straight quarters of expansion. Adjusted EBITDA is forecast to remain strong at no less than 66% of projected revenue.
Analysts anticipate fiscal Q3 2025 EPS growth of 31% YOY, reaching $1.34. For the full fiscal year, the bottom line is expected to climb 47% to $5.47. Looking ahead to fiscal 2026, EPS is projected to increase another 29% to $7.04.
What Do Analysts Expect for Broadcom Stock?
Analyst sentiment around AVGO stock remains firmly positive, and recent activity from top firms reinforces that stance. Mizuho maintained an 'Outperform' rating on shares, lifting its price target to $315. JPMorgan echoed that optimism with its own 'Overweight' rating and a $325 target. Finally, KeyBanc raised its target from $315 to $330 while reiterating an 'Overweight' rating.
AVGO currently holds a 'Strong Buy' consensus overall. Out of 36 analysts covering the stock, 32 recommend a 'Strong Buy,' one assigns a 'Moderate Buy,' and only three analysts suggest a 'Hold" rating.
The average price target of $296.13 represents potential upside of 5.4% from current levels. Meanwhile, the Street-high target of $400 suggests a potential climb of 42% from here. All signs point to continued confidence in Broadcom's execution and its place at the center of AI's explosive rise.
On the date of publication, Aanchal Sugandh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com