Should you buy AVGO right now?

Hot chip giant and Apple supplier Broadcom Ltd (NASDAQ:AVGO) is looking pretty impressive right now. TipRanks reveals that in the last three months, the stock has received an incredible 23 back-to-back analyst buy ratings. AVGO has already soared by 55% year-to-date and top analysts say there is still plenty of upside potential left. Let’s take a closer look at just why you should make this a key stock to track right now.

Media Buzz

First, AVGO has been generating some serious media buzz over the last week. Check out here how the number of articles generated on AVGO has exploded in the last 7 days:

Indeed Broadcom has just made a number of big announcements- including reports that it plans to make an acquisition bid for smartphone chip supplier Qualcomm Inc (NASDAQ:QCOM). If the deal was successful it would create a $200-billion company and be the biggest tech acquisition ever. “It’s a smart move that would make Broadcom into a tech juggernaut,” GBH Insights analyst Daniel Ives tells Reuters.

Only a couple of days previously, AVGO pre-announced positive Q4 earnings results. The company disclosed that it expects revenue at the higher end of its previous guidance calling for $4.8B +/- $75M range. While there was no additional commentary from management to explain these results, the upside is likely the result of AVGO’s 40% content increase in Apple’s iPhone 8 and iPhone X.

Word on the Street

Given all these juicy updates, it is hardly surprising that the stock has received a slew of recent buy ratings (7 in the last week). One of the most bullish analysts is five-star JP Morgan analyst Harlan Sur. He came out with one of the stock’s highest price targets of $315 (15% upside potential from current share price) on November 3.

He says that due to strong near-term demand trends, management is very likely to raise the annual dividend by 50% to $6 in early December. At the same time, he believes that AVGO will move its legal headquarters back to the US with or without the implementation of proposed tax reforms. This should enable the $5.5bn Brocade Communications deal to close in two weeks says Sur.

Sur is ranked highly by TipRanks- but can we trust his recommendations on AVGO specifically? TipRanks enables us to double-check Sur’s track record on each stock he covers. Clicking on his name and then his AVGO recommendation reveals a very promising track record:

And Sur isn’t the only analyst making such confident observations. Taking a closer look at recent reports from other top analysts reveals the following quotes:

“We reaffirm Buy, top sector pick, $300 PO… We believe AVGO is today where Texas Instruments (NASDAQ:TXN) was many years ago when it successfully embarked on a very successful journey of free cash flow returns” comments Merrill Lynch’s Vivek Arya.

Meanwhile top Oppenheimer analyst Rick Shafer, who calls AVGO a ‘top sector pick’, says: “We continue to be long-term buyers of Broadcom, as we believe the company offers the rare combination of double-digit organic growth, ballooning FCF/capital return, with ample dry powder for M&A in addition to BRCD’s [Brocade’s] $1+ accretion.”

The Smart Money

Interestingly, if we return to TipRanks’ AVGO page, we can see that the stock’s other data points confirm this bullish outlook. For example, the hedge fund confidence signal is described as ‘Very Positive’. Hedge funds increased holdings by 847,400 shares last quarter.

Similarly, financial bloggers have an incredible 96% bullish outlook on AVGO. One top blogger even writes that “AVGO still has massive upside potential.”

If you like AVGO, check out this ‘Strong Buy’ stock…

If you are looking for further investing inspiration, scroll down the page to the Similar Stocks section. TipRanks automatically pulls up stock names from its databank that could be relevant to you. For example, for AVGO, one of the similar stocks listed is semiconductor provider Microsemi (NASDAQ:MSCC). This also looks like an interesting stock to follow. We can immediately see that the stock has a Strong Buy analyst consensus rating. Plus it has an impressive 17.7% upside potential from the current share price.

Now find your own top-rated stock ideas with TipRanks

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