Broadcom (AVGO) could be set up well in the short- and long-term through a combination of the secular growth of its artificial intelligence business, continued software integration and execution, and potential rebound of its non-AI semis, Deutsche Bank said in a Friday note.
The company's fiscal Q2 results and Q3 outlook were "largely in-line with expectations," Deutsche Bank said, noting that AI delivered upside during fiscal Q2, while software remained steady and non-AI semis saw a slower recovery.
"The lack of a cyclical recovery in non-AI is likely to remain a headwind into F4Q, but we expect investors to more eagerly focus on the growth trajectory in [Broadcom's] AI business, Deutsche Bank said. The firm also noted increasing demand from the company's three primary XPU customers and Broadcom's continued "general dominance" in ethernet connectivity.
Deutsche Bank reiterated its buy rating on Broadom, with a higher price target of $270.
Price: 250.81, Change: -9.12, Percent Change: -3.51
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