Broadcom (AVGO +1.42%) stock was a winner on a fairly forgettable Monday for the market. During a session when the benchmark S&P 500 index could only eke out a less than 0.1% gain, Broadcom added nearly 1% to its share price. The company largely has a new research report to thank for that.
Buy AI, says researcher
Before market open, Mizuho Securities published an update on a select group of stocks involved in the market for artificial intelligence (AI) server products. It timed this to coincide with the upcoming quarterly earnings report scheduled to be published by Broadcom, a notable player in that segment.
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Peer companies reporting in the very near future are the segment's 800-pound gorilla, Nvidia, as well as Credo Technology Group and retailer Dell Technologies.
According to reports, Mizuho's analysts believe that intensifying demand for AI solutions and activity throughout the supply chain suggest prosperous times are coming for such companies. As for Broadcom specifically, the researcher believes the company should see increased take-up of its custom chip solutions from such tech heavyweights as Alphabet's Google and Apple.
In the report, Mizuho raised its price targets on several of the covered stocks, including Dell but excluding Broadcom. Nevertheless, it reiterated its outperform (read: buy) recommendation on the latter stock, as well as its $250-per-share price target.
NASDAQ: AVGO
Key Data Points
A lasting trend
The swing toward AI is not a short-term fad or a fluke; it's very much a strong and sustainable movement toward significantly more powerful (and useful) computing. Given that, I think Mizuho's quite bullish take on a range of sector names is justified, particularly with the well-performing and cleverly managed Broadcom. This stock feels very much like a buy to me.
