Broadcom stock price gained some momentum in the past couple of weeks amid stronger than expected second-quarter results. The rosy outlook for the third quarter added to investors sentiments as the company expects a massive increase in demand from telecom, cloud, and enterprise customers.

Broadcom topped second-quarter consensus estimate by $50 million and its earnings per share of $1.17 have beaten expectations by $0.21 per share. Its second-quarter revenue of $5.74 billion grew 4% from the past year period while earnings remained flat year over year.

Its shares gained almost 7% so far this year, up 22% in the past twelve months. Despite the sluggish past performance, the market analysts expect a significant upside in the coming days.

Credit Suisse has set a price target of $400, up sharply from the current price of $340. The firm is seeing robust demand from broadband, industrial, and storage products.

Credit Suisse is also expecting its businesses to grow from secular developments like 5G growth/deployment and hyperscale/data-center growth.

JPMorgan has set a price target of $365. The firm is showing confidence in Broadcom’s business diversification and free cash flow generation.

AVGO Broadcom Inc. daily Stock Chart

JPM also expects a dividend increase in the final quarter this year. The company has generated $3.3 billion in operating cash flows during the second quarter. The company ended the third quarter with $9 billion in cash.

It expects third-quarter revenue in the range of $5.75 billion while the company is guiding adjusted EBITDA around $3.2 million.

“Looking ahead, our third-quarter guidance for semiconductors reflects a surge in demand from the cloud, telecom and enterprise customers, offset by supply chain constraints and an expected substantial reset in wireless,” Hock Tan, President, and CEO of Broadcom said.

“We remain focused on investing in our diverse set of mission-critical semiconductor and software franchises, while carefully managing our expenses in this uncertain environment,” CEO added.