Investors spent the first half of the year driving up shares of companies thought to factor into the artificial-intelligence revolution, but now they’re starting to show more exacting standards. As such, Broadcom Inc.’s
in-line outlook from late Thursday wasn’t enough for Wall Street, with investors likely looking for more upside given the 65% year-to-date rally in the shares leading up to the latest report.
Broadcom’s stock was off about 4% in premarket trading Friday. Investors likely were anticipating a stronger outlook fueled by generative AI, wrote Wells Fargo’s Aaron Rakers, referring to the type of artificial intelligence popularized by OpenAI’s ChatGPT. Rakers added that “AI visibility remains somewhat limited past 2024 and the company is shipping to meet demand,” while reiterating an equal-weight rating on the stock but boosting his price target to $900 from $800. See also: Intel offers an upbeat update, sending its stock higher Evercore ISI’s Matthew Prisco also highlighted that Broadcom’s near-term upside was “not quite as robust as hoped.” While he said he is upbeat about the company’s growth prospects for fiscal 2024, he noted that “on the AI front, fab cycle times are clearly modulating AVGO’s Gen AI revenue ramp cadence to an extent amidst robust demand – perhaps a bit of a disappointment for some anticipating a steeper near-term AI ramp.” Prisco gave an outperform rating and $1,000 price target on Broadcom’s stock. Don’t miss: Why AMD, Marvell, Intel and other chip stocks sank after Nvidia earnings TD Cowen’s Matthew Ramsay said there were “sky-high expectations” for Broadcom, meaning that Wall Street was “perhaps disappointed on [ …