Broadcom upgraded at Goldman
NEW YORK (AP) – Chip maker Broadcom Corp. is becoming one of the best bets in the tech sector, taking market share in the cell phone business and benefiting from the growth of smartphones, a Goldman Sachs analyst said Thursday.
James Schneider upgraded the company's stock to "Buy" from "Neutral" in a note to investors and raised his price target for shares to $40 from $32.
He pointed to three trends that could help Broadcom, which makes communications chips for everything from cell phones to the wireless networks that connect them.
First, he predicts Broadcom will grow its market share in the handset market to more than 13 percent by the end of 2011, up from 3 percent to 4 percent in the fourth quarter of 2009.
He also expects the company to generate more revenue from chips that go into network equipment as wireless providers upgrade their systems to deal with heavier Internet traffic on cell phones.
Finally, Schneider said Broadcom will benefit as more phones include GPS and Wi-Fi capability.
Broadcom's stock edged up 19 cents to $33.80 in midday trading.