Broadcom (AVGO) stock has long been viewed as a high-potential buy on Wall Street. However, that perception took a significant hit with the uncertainty facing the global market. The stock is only up 1% year to date after a sluggish start to 2025. Fortunately, AVGO is finally showing momentum, up 41% in the last 30 days alone.
Broadcom stock has delivered substantial long-term growth, soaring over 300% since early 2023. The company has a stable balance sheet, an impressive client base, and a unique product. The chipmaker is a contributor to a growing market in AI and chip technology. Its chips are used in a wide range of applications, and the chip maker’s numbers speak for themselves. The growing demand for Broadcom’s chips and the rapid expansion of the AI industry continue to drive business growth, making it a promising investment option.
While AVGO stock has had a great run, experts suggest it is far from over. In fact, Broadcom shares could continue this 300% rise even further in the next 12 months, climbing perhaps another 27% to $300. At press time, AVGO stock is changing hands at $234. Analysts suggest the following factors could contribute to the stock’s continued success:
- A significant 190% increase in the company’s price-to-earnings (P/E) ratio, rising from 14 in 2022 to the current 41.
- A substantial 61% growth in the company’s adjusted net income, increasing from $16 billion to $26 billion; partially offsetting these positive drivers is:
- A 14% increase in the total number of outstanding shares, now at 4.8 billion
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As mentioned previously, AI revenue is the biggest contributor to Broadcom (AVGO)’s success. The company’s AI revenue reached $12.2 billion in fiscal year 2024, demonstrating an impressive 220% year-over-year increase. Furthermore, Broadcom has consistently maintained an adjusted net margin exceeding 45% in recent years. Thus, AVGO’s 600% growth in the last five years could continue in the next few years, sending Broadcom stock towards Nvidia levels.