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With a 5-year average dividend growth rate of 12.60%, Broadcom Inc. (NASDAQ:AVGO) is included among the 14 Best Dividend Stocks to Buy for Steady Growth.

Citi Says Broadcom (AVGO) Could Beat April Quarter Estimates on AI Strength

On May 12, Citi analyst Atif Malik raised the firm’s price target on Broadcom Inc. (NASDAQ:AVGO) to $500 from $475 and maintained a Buy rating on the shares as part of an earnings preview. Citi said stronger AI demand could help Broadcom deliver April quarter results slightly above expectations. The firm also pointed to improved earnings visibility as a reason for the higher target.

“We model Apr-Q and Jul-Q sales/EPS modestly above consensus, driven by stronger AI demand,” Malik wrote in a note to clients. He also said Broadcom’s deal with Anthropic (ANTHRO) could provide additional benefits, as the shift from rack shipments to chips may support gross margins.

Malik added that Broadcom is also in discussions with three other customers regarding custom AI chips. The company already has agreements with Google, Meta, Anthropic, and OpenAI, along with two unnamed customers, one of which is believed to be ByteDance (BDNCE).

“We believe AVGO is engaged with three additional customers on custom AI chips,” Malik added. “While it is possible for AVGO to work with companies without their own LLMs on XPUs, it believes they are unlikely to scale to the size and depth of the current engagements.”

Broadcom Inc. (NASDAQ:AVGO) designs, develops, and supplies semiconductors, enterprise software, and security solutions. The company operates through two segments: semiconductor solutions and infrastructure software.

While we acknowledge the risk and potential of AVGO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AVGO and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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