Broadcom slips even as BofA says Apple deal removes 'key' overhang for stock
Justin Sullivan
Broadcom (NASDAQ:AVGO) shares slipped fractionally in pre-market trading on Wednesday even as Bank of America said yesterday's deal announcement with Apple (NASDAQ:AAPL) removes a "key" overhang for the stock.
Analyst Vivek Arya said that even though the deal did not provide much in the way of specifics, it is a "positive development" for the Hock Tan-led company nonetheless, as it removes the risk of Apple using its own connectivity components for devices. 
"We reiterate Buy on AVGO on this improved certainty, and separately on its highly underappreciated/overlooked position as a leading provider of custom AI computing and switching silicon," Arya wrote in an investor note.
Despite the fact that the Apple (AAPL) deal is a mature business, Arya said it gives Broadcom (AVGO) a "solid annuity-like business" and provides multi-year certainty against other competitors, including Skyworks Solutions (SWKS) and Qorvo (QRVO). 
Arya added that Broadcom (AVGO) is the "most underappreciated" beneficiary from artificial intelligence, as it is the leader in cloud switching and customer accelerator chips for customers such as Google (GOOG) (GOOGL), Meta Platforms (META) and others.
Arya boosted his per-share price target to $800 from $725 on back of the announcement. 
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