Morgan Stanley Raises Broadcom Price Target to $382

Morgan Stanley analyst Joseph Moore raised the price target on Broadcom Limited (NASDAQ: AVGO) to $382 (from $357) while maintaining an Overweight rating.

“This is one of the most credible management teams in our coverage, but it’s worth noting that they have never done this type of 2-3 year forecasting before, that ASIC programs are delayed frequently, that export controls are a major factor where AVGO evades scrutiny that has dominated the dialogue vs. merchant peers.

The major ASIC customers are all multisourcing and pushing on multiple vectors at once, and could at some point choose a different lane.

We note that NVIDIA forecast $7 bn of sequential growth, more than the entirety of AVGO quarterly AI revenue, with 3-4x the networking revenue, so some of AVGO’s share gain commentary falls flat.So we aren’t buying into 100% of the narrative here, but buying into 80% of it is still a very compelling story given Broadcom’s strong track record of execution.

They haven’t posted the upside that NVIDIA has, and the stock is much more expensive especially considering the large amount of legacy semis and software earnings, butthere are some big ramps ahead.”

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