Broadcom (AVGO), valued at a market cap of $980 billion, is among the largest semiconductor companies globally. The chip stock went public in 2009 and has since returned more than 13,000% to shareholders. If we adjust for dividend reinvestments, cumulative returns are closer to 17,800%. 

Despite these market-thumping gains, AVGO stock is down more than 17% from all-time highs. But analysts see a path higher for AVGO over the next 12 months. 

Last month, Jeffries analyst Blayne Curtis maintained a “Buy” rating on Broadcom stock with a 12-month target price of $300. 

Let’s see if you should own AVGO stock at its current valuation.

Is Broadcom Stock a Good Buy Right Now?

Broadcom designs and manufactures advanced semiconductors and software solutions across two segments. It provides networking components, connectivity technologies, storage solutions, and custom chips that power enterprise data centers, AI infrastructure, telecommunications equipment, consumer electronics, and industrial applications worldwide. These products enable critical digital infrastructure for modern communications and computing.

In its fiscal first quarer, Broadcom reported record revenue of $14.9 billion, an increase of 25% year over year, powered by robust demand for its AI products. The semiconductor and software giant saw its adjusted EBITDA surge 41% from a year ago to $10.1 billion, representing 68% of revenue. The strong performance was primarily driven by its AI business, which generated $4.1 billion in revenue, up 77% year-over-year.

Broadcom’s AI growth comes as hyperscale customers continue investing aggressively in next-generation frontier models that require high-performance accelerators and larger AI data center clusters. Broadcom reaffirmed its expectation that its three current hyperscale customers will generate a serviceable addressable market of $60-90 billion by fiscal 2027.

Beyond those customers, Broadcom is deepening engagement with four additional hyperscalers to develop custom AI accelerators. In Q2, the chip maker expects AI revenue to grow to $4.4 billion, up 44% year-on-year.

While AI drove growth, Broadcom's non-AI semiconductor revenue was $4.1 billion, down 9% sequentially, due to a seasonal decline in wireless. The recovery in this segment continues to be slow, with enterprise networking remaining flat as customers work through channel inventory.

Revenue for the infrastructure software segment, which includes VMware, stood at $6.7 billion, up 47% year-on-year. Broadcom is seeing significant growth in this segment as it converts from perpetual licenses to subscriptions and upsells customers to full-stack virtualization.

What Is the Target Price for AVGO Stock?

Looking ahead, Broadcom expects Q2 revenue of $14.9 billion, up 19% year over year, with semiconductor revenue growing 17% to $8.4 billion and software revenue increasing 23% to $6.5 billion.

Broadcom is also stepping up R&D investments to push the boundaries of AI technology, including developing the industry’s first 2-nanometer AI XPU and next-generation networking products to support AI clusters with up to 1 million accelerators.

Analysts tracking Broadcom stock expect sales to rise from $51.57 billion in fiscal 2024 to $123 billion in fiscal 2029. Comparatively, adjusted earnings per share are forecast to expand from $4.87 to $14.50 in this period. 

AVGO stock trades at a forward price-earnings multiple of 30x, higher than its three-year average of 21x. If Broadcom stock is priced at 25x, it will trade around $360 in early 2029, indicating an upside potential of 75% from current levels. 

Of the 32 analysts covering AVGO stock, 29 recommend “Strong Buy” and three recommend “Hold.” The average target price for Broadcom stock is $241.74, 11% above the current trading price.