08:24 AM EDT, 09/06/2024 (MT Newswires) -- Despite growth that is "not linear," Broadcom's ( AVGO ) AI revenue remains "strong," Morgan Stanley said Friday in a note to investors.

Though sales of its AI-compatible processors have been "flattish," growth is still close to three times this year, and "sequential growth resumes in October," the report said.

Morgan Stanley projects 25% growth for the company next year to at least $15 billion of AI revenue.

Morgan Stanley said it did not agree with the characterization that Broadcom's ( AVGO ) AI application-specific integrated circuit chips are unequivocally superior to Nvidia's (NVDA) when it comes to cloud-scale applications. But Broadcom's ( AVGO ) additions of two new quality customers this year should help its positions in comparison to chipmakers with greater market share.

Morgan Stanley has an overweight rating on the stock with a price target of $180.

Broadcom ( AVGO ) shares were down by more than 7% in Friday's premarket activity.

Price: 141.09, Change: -11.73, Percent Change: -7.68