After reaching a record price earlier this month, the stock of chipmaker Broadcom has been sliding in recent days. But Bank of America’s (BofA) analyst Vivek Arya believes that the company’s shares are primed for another surge and will reach even bigger heights.
In a recent note to clients, Arya reiterated “Buy” rating on Broadcom stock while raising his price target. He now projects $2,150 per share, up from his previous target of $2,000.
“In our view, Broadcom’s diverse growth drivers, highly regarded management team, and unique track-record of capital appreciation, dividend growth and above market dividend yield can justify a premium multiple,” Arya wrote in the note.
Arya adds that the performance of Broadcom stock could be impacted by “shifts in the sentiment or fundamentals around AI in the business.”
Broadcom provides networking chips while also helping large tech companies like Google’s parent company Alphabet to develop AI chips. It reportedly also engaged in a partnership with TikTok’s owner ByteDance to develop an artificial intelligence processor.
Helped by AI frenzy, Broadcom’s stock reached a record price of $1,828.87 per share on June 17th. The stock has been on a downward trajectory since, sliding to a $1,580.79 close price on Tuesday. It is currently 45.64% up year-to-date.