On a fairly forgettable Wednesday for U.S. stock markets, Broadcom (AVGO 0.76%) was a bit of an outperformer. The company's stock saw a bump in price, rising by 0.7% after an analyst initiated coverage with a positive evaluation. That performance, although modest, was good enough to top the essentially flat-lining S&P 500 index.

A potential 20% price gain

That morning, before the market's opening bell, Seaport Global Securities's Jay Goldberg launched his coverage of Broadcom. Happily for the company and its investors, Goldberg rated the sturdy tech stock as a buy, at a price target of $230 per share. That figure anticipates nearly 20% upside to the current price.

According to reports, Goldberg's bullish take on Broadcom is due to several factors, among which is its determination to address the demands for artificial intelligence (AI) functionalities. The analyst believes the company is one of the leading beneficiaries of the surge in spending for such functionalities, but this isn't yet priced into its stock.

He also pointed to Broadcom's impressive client list, which includes sector powerhouses such as Alphabet's Google, Apple, and TikTok. He also mentioned that the company's core, non-AI products are very competitive on the market and quite profitable to boot.

Varied sources of revenue

Broadcom is a robust and successful business that has several thick revenue streams, not least of which is its custom chip offerings. I'd agree with Goldberg's assessment that its commitment to AI isn't fully appreciated by the market, and I think his buy recommendation on the shares is entirely justified.