Analysts boost Broadcom numbers after Apple contract

Wall Street analysts are weighing in positively on yesterday’s announcement from Apple (NASDAQ:AAPL) and in connection with the new partnership with Broadcom (NASDAQ:AVGO).

Two companies announced a “multi-billion-dollar” deal that will see the tech behemoth purchase 5G radio frequency components from Broadcom, including the FBAR filters.

“We’re thrilled to make commitments that harness the ingenuity, creativity, and innovative spirit of American manufacturing,” said Tim Cook, Apple’s CEO.

CFRA analysts boosted the AVGO price target to $750 per share after hiking P/E to reflect the Apple deal.

“We positively view the extension given AAPL’s recent endeavors to internally source more chips and rumors earlier this year that certain AVGO chips could be displaced (in 2025). We also note that AAPL is AVGO’s largest customer, about 20% of sales over the last year,” they said in a client note.

“We like AVGO’s story, largely given opportunities that are evolving in the cloud, specifically as it relates to its AI initiatives – both on the network connectivity side and as a co-developer of application specific chips (e.g.,Alphabet’s TPUs). Despite the uncertainty surrounding the pending VMware deal, we think shares have upside whether a deal is done or not.”

Similarly, BofA analysts also raised the price target on Buy-rated AVGO shares as he went to $800 per share. The analysts argue that the Apple contract removes “key overhang re trends at largest customer.”

“We reiterate Buy on AVGO on this improved certainty, and separately on its highly underappreciated/overlooked position as a leading provider of custom AI computing and switching silicon,” they said in a note.

The analysts also added that Broadcom is the “most underappreciated AI beneficiary.”