Latest news with #Reitzes
Yahoo
6 days ago
- Business
- Yahoo
Broadcom Is Back in the $1 Trillion Club. But the Party Has Just Begun and the Stock Can Hit a New All-Time High, According to 1 Wall Street Analyst.
Like most large AI stocks, Broadcom has experienced volatility this year. But its custom chip solutions for artificial intelligence seem to be gaining traction. One Wall Street analyst thinks Broadcom has a much larger serviceable market ahead. 10 stocks we like better than Broadcom › There are only about a handful of stocks that have a $1 trillion market value. The members include some of the most popular in the market -- Nvidia, Tesla, Apple, and Berkshire Hathaway, just to name a few. Toward the end of the last year, the custom chipmaker Broadcom (NASDAQ: AVGO) went on a massive run and joined the exclusive club. However, after the intense sell-off in April due to tariffs and the global trade war, Broadcom fell all the way below a $700 billion market capitalization. After the recent rally that has ensued since mid-April, Broadcom has now rejoined the $1 trillion club (as of May 28). But one Wall Street analyst thinks the party has only just begun and that shares will soon hit a new all-time high. While there will be no unseating Nvidia, long considered the king of the more general graphics processing unit (GPU) space, Broadcom has gained traction with its custom chips designed for more specific work loads. For instance, one of Broadcom's core products is its custom application-specific integrated circuit (ASIC), referred to as XPU. The XPUs are supposed to be better for inference, which in AI means teaching large language models to leverage real-time data to see patterns and make forecasts that help solve specific tasks. Broadcom works with hyperscalers like Meta Platforms and other key players in the AI sector like OpenAI to develop custom chips for their perspective businesses and AI workloads. Melius Research analyst Ben Reitzes views custom chips less as a competitor to Nvidia and more as a complement. "Companies dual source compute from both Nvidia and Broadcom for flexibility around different workloads -- but all remain committed to both," Reitzes said in his recent research note. He also raised his price target on Broadcom from $198 per share to $283, implying another 19.4% upside from current levels. Part of Reitzes' upgrade includes a rerating to value Broadcom at 30 times his projected 2027 earnings instead of a 22 multiple, because the analyst sees a realistic path to 43% compound annual growth in revenue from AI processors over the next decade. Broadcom has also announced new customers for its custom AI chip solutions, potentially increasing its overall market. "With 7 XPU customers now confirmed, the serviceable addressable market could arguably be increased later in the decade to a range of $140-$210 billion -- with Broadcom garnering well over $70 billion in AI revenue later in the decade given its market share at these 7 customers," Reitzes wrote. He also sees potential tailwinds as Broadcom scales its specialized networking chip business and implements larger-than-expected share repurchases. The shares trade at around 36 times forward earnings, so a 30 multiple is not unrealistic if the company continues to add and retain customers. Broadcom continues to grow at a fast clip. In the first quarter of 2025, the company grew revenue by 25%, while earnings per share increased by over 300%. Broadcom's customers also include some of the strongest names in the AI sector. Most of these customers are cash cows with massive capital expenditure (capex) plans. While capex may ebb and flow, the race to create the best AI solutions has only just begun and these large players are going to constantly need to innovate. I also think a stock that is working around or in tandem with Nvidia -- and not as a direct competitor -- is a good place to operate because then Broadcom can more or less feed off Nvidia's growth. Sure, Nvidia will always be the main GPU player, but Broadcom's XPUs can be deployed alongside them and can help AI workloads hone in on specific tasks. For all of these reasons, I would have to agree with Reitzes and assume that a new all-time high for the stock is just a matter of time. Before you buy stock in Broadcom, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Broadcom wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $842,015!* Now, it's worth noting Stock Advisor's total average return is 987% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Meta Platforms, Nvidia, and Tesla. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy. Broadcom Is Back in the $1 Trillion Club. But the Party Has Just Begun and the Stock Can Hit a New All-Time High, According to 1 Wall Street Analyst. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
Broadcom Is Back in the $1 Trillion Club. But the Party Has Just Begun and the Stock Can Hit a New All-Time High, According to 1 Wall Street Analyst.
Like most large AI stocks, Broadcom has experienced volatility this year. But its custom chip solutions for artificial intelligence seem to be gaining traction. One Wall Street analyst thinks Broadcom has a much larger serviceable market ahead. 10 stocks we like better than Broadcom › There are only about a handful of stocks that have a $1 trillion market value. The members include some of the most popular in the market -- Nvidia, Tesla, Apple, and Berkshire Hathaway, just to name a few. Toward the end of the last year, the custom chipmaker Broadcom (NASDAQ: AVGO) went on a massive run and joined the exclusive club. However, after the intense sell-off in April due to tariffs and the global trade war, Broadcom fell all the way below a $700 billion market capitalization. After the recent rally that has ensued since mid-April, Broadcom has now rejoined the $1 trillion club (as of May 28). But one Wall Street analyst thinks the party has only just begun and that shares will soon hit a new all-time high. While there will be no unseating Nvidia, long considered the king of the more general graphics processing unit (GPU) space, Broadcom has gained traction with its custom chips designed for more specific work loads. For instance, one of Broadcom's core products is its custom application-specific integrated circuit (ASIC), referred to as XPU. The XPUs are supposed to be better for inference, which in AI means teaching large language models to leverage real-time data to see patterns and make forecasts that help solve specific tasks. Broadcom works with hyperscalers like Meta Platforms and other key players in the AI sector like OpenAI to develop custom chips for their perspective businesses and AI workloads. Melius Research analyst Ben Reitzes views custom chips less as a competitor to Nvidia and more as a complement. "Companies dual source compute from both Nvidia and Broadcom for flexibility around different workloads -- but all remain committed to both," Reitzes said in his recent research note. He also raised his price target on Broadcom from $198 per share to $283, implying another 19.4% upside from current levels. Part of Reitzes' upgrade includes a rerating to value Broadcom at 30 times his projected 2027 earnings instead of a 22 multiple, because the analyst sees a realistic path to 43% compound annual growth in revenue from AI processors over the next decade. Broadcom has also announced new customers for its custom AI chip solutions, potentially increasing its overall market. "With 7 XPU customers now confirmed, the serviceable addressable market could arguably be increased later in the decade to a range of $140-$210 billion -- with Broadcom garnering well over $70 billion in AI revenue later in the decade given its market share at these 7 customers," Reitzes wrote. He also sees potential tailwinds as Broadcom scales its specialized networking chip business and implements larger-than-expected share repurchases. The shares trade at around 36 times forward earnings, so a 30 multiple is not unrealistic if the company continues to add and retain customers. Broadcom continues to grow at a fast clip. In the first quarter of 2025, the company grew revenue by 25%, while earnings per share increased by over 300%. Broadcom's customers also include some of the strongest names in the AI sector. Most of these customers are cash cows with massive capital expenditure (capex) plans. While capex may ebb and flow, the race to create the best AI solutions has only just begun and these large players are going to constantly need to innovate. I also think a stock that is working around or in tandem with Nvidia -- and not as a direct competitor -- is a good place to operate because then Broadcom can more or less feed off Nvidia's growth. Sure, Nvidia will always be the main GPU player, but Broadcom's XPUs can be deployed alongside them and can help AI workloads hone in on specific tasks. For all of these reasons, I would have to agree with Reitzes and assume that a new all-time high for the stock is just a matter of time. Before you buy stock in Broadcom, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Broadcom wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $842,015!* Now, it's worth noting Stock Advisor's total average return is 987% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Meta Platforms, Nvidia, and Tesla. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy. Broadcom Is Back in the $1 Trillion Club. But the Party Has Just Begun and the Stock Can Hit a New All-Time High, According to 1 Wall Street Analyst. was originally published by The Motley Fool
Yahoo
13-05-2025
- Business
- Yahoo
Analyst, Consultant Clash on Apple Inc. (AAPL) Stock
Analyst Ben Reitzes and consultant Dan Nathan had a bull-bear debate about Apple Inc. (AAPL) stock on CNBC on May 7. Reitzes suggested that Apple's future is bright, while Nathan warned that the tech giant was "massively behind the 8 ball" in terms of technology and suggested that it would be significantly damaged by the problems facing its Services business. A wide view of an Apple store, showing the range of products the company offers. Reitzes is Managing Director and Head of Technology Research at Melius Research, while Nathan is the principal of RiskReversal Advisors. Reitzes' Bullish Take on Apple Inc. (AAPL) After AAPL disclosed that the search traffic on its browsers had dropped for the first time last month, Retzes said that AAPL could cope effectively with the issue by launching a new search product. And suggesting that the iPhone will not be disrupted by AI, he said that, "People will always need a device to access AI." Further, the firm can overcome the weakness of its Services business by introducing "new services with AI that people aren't thinking about and charge for it." Finally, even if courts prevent Apple Inc. (AAPL) from obtaining payments from app owners, it can "make up for that... with new services, new arrangements, and new innovations in services that people will pay for," he predicted. Nathan's Bearish Take on AAPL Apple's AI offerings were insubstantial, and 20% of its Services revenue comes from GOOG, Nathan noted. Apple Inc. (AAPL) "has no strategy right now," he contended. While we acknowledge the potential of AAPL, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AAPL but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Time of India
07-05-2025
- Business
- Time of India
$20 billion at risk? Nvidia's China exposure triggers pre-earnings alarm from Bank of America
Pressure Mounts for Nvidia Big Tech Capital Spending to Surge in 2025 China Loss Puts More Strain Live Events Nvidia Revenue Forecast FAQs Nvidia's China revenue is suffering big time, as new US export regulations have impacted the chipmaker directly. Bank of America now projected that Nvidia may face a loss of about $15 billion to $20 billion per year in revenue because of the export restrictions, as per a Nvidia gets ready to report earnings on May 28, the increasing China loss is placing further pressure on the company, according to Reitzes, an analyst at Melius Research, admitted Nvidia's new offerings, such as the newly released GB300 and Vera Rubin chips, are stunning, but he emphasized the company has to develop new ways of expanding rapidly to make up for lost demand in China, as per though Nvidia shares fell 15% this year, analysts continue to be bullish, according to the report. Reitzes highlighted that the AI race is existential for giants like Microsoft, Meta, and Alphabet, with demand for Nvidia's chips still high, even as some firms develop custom silicon, as per Bank of America's Vivek Arya called the China situation a "vanishing act" for Nvidia, pointing out that there is a need for hyperscalers to increase their capital spending to bridge the revenue gap, according to the also cautioned that the long-term market opportunity for Nvidia's data centre business may have reduced by 20%. Still, Bank of America projects Big Tech capital spending to increase 35% in 2025, according to per the report, Nvidia is expected to post $43.12 billion in revenue and 89 cents in EPS for the upcoming revenue from China is suffering due to tightening US export of America estimates that Nvidia could lose $15 billion to $20 billion annually due to the export restrictions, reported GuruFocus.
Yahoo
06-05-2025
- Business
- Yahoo
Tech Researcher Says That Apple Inc (AAPL) Is Well-Positioned, Stock Is a Buy
The Trump administration's tariffs will prove to be "pretty transitory," while Apple's (AAPL) new iPhones will have higher average sales prices than their predecessors, Ben Reitzes, a Managing Director and Head of Technology Research at Melius Research told CNBC recently. As a result of these points, Reitzes has a Buy rating on AAPL stock. Was Jim Cramer Right About Apple Inc. (AAPL)? A wide view of an Apple store, showing the range of products the company offers. How Tariffs Will Affect Apple Inc. (AAPL), According to Reitzes Reitzes says that he's "pretty optimistic" that there will "eventually (be) a deal" between the U.S. and China regarding tariffs. Nonetheless, Apple's profit margins are likely to undergo downward pressure over the longer term as the company shifts some of its supply chain to the U.S., he predicted. But the researcher suggested that Apple would not be significantly damaged by tariffs over the longer term. Analyzing Apple Inc (AAPL)'s Services Business After a federal court ruled that Apple Inc (AAPL) had violated an injunction restricting the fees that it charges on app sales made outside of its ecosystem, the tech giant began allowing the owners of App Store apps to direct users to their websites. In the wake of Apple's move, the tech giant declined to provide guidance for its Services business for the current quarter, Reitzes noted. But, according to the researcher, AAPL can potentially take various, positive steps, including launching new services and making new deals with Alphabet (GOOG) and/or Open AI. Such initiatives will make investors "less worried" about the tech giant's Services business, he said. While we acknowledge the potential of AAPL, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AAPL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires Disclosure: None. This article is originally published at Insider Monkey
