Broadcom Inc Named Top Pick for 2025

Investing.com — Jefferies has identified Broadcom Inc (NASDAQ:AVGO) as its top choice for 2025, citing the company’s robust presence in the rapidly expanding AI chip sector, which is fueled by the demand for custom-designed chips, or ASICs.

Jefferies has increased its price target on Broadcom stock to $300 from $225, anticipating significant growth in earnings.

Broadcom’s advanced chips are positioned to compete with Nvidia (NASDAQ:NVDA) Corp’s offerings in terms of compute density, especially with the adoption of new technologies such as 3.5D packaging and silicon photonics.

The brokerage emphasized Broadcom’s contribution to the development of powerful AI clusters, as major clients plan to deploy 1 million computing units. These clusters are vital for supporting artificial general intelligence, a crucial innovation area.

Jefferies projects that Broadcom’s AI chip sales might yield over $60 billion in revenue by 2027, propelling earnings per share above $12. The brokerage sees significant upside if Broadcom captures even a small portion of the high-end market.

Broadcom’s AI division has been gaining traction, especially regarding training-focused chips, which tend to have higher prices as designs grow more complex. The company’s chips are expected to expand in size and incorporate advanced technologies, thereby enhancing average selling prices.

Moreover, Jefferies highlighted a positive outlook for Broadcom’s networking and optical products.