UBS raised its price target for Broadcom Limited ( AVGO , Financial ) from $270 to $220 on Monday and reiterated a BUY rating. That upgrade reflects a rising confidence in Broadcom's growth potential, in particular its ability to gain traction in custom compute and artificial intelligence (AI) networking.

Just over a year ago, Broadcom was valued at an incredible almost $1 trillion; it's achieved a nearly 100% return YTD. InvestingPro says its shares are trading above Fair Value with positive earnings revisions from 20 analysts.

After Broadcom's SAM deep dive and AI revenue potential, Broadcom hikes its price target. UBS also forecasts that the AI revenue will grow 20 percent next year and 40 percent in 2027, buoyed by SAM expansion, and hopes the bank may add two more hyperscaler clients. In fact, Broadcom has seen its revenue grow an impressive 44 percent over the past 12 months.

UBS also highlighted that its projections are based on conservative perspective market share assumptions, but the built-in upside could be even more than you'd think with broadband further diversifying its hyperscaler customer base. This bullish outlook speaks to Broadcom's major efforts to leverage this growing AI market and remain on its growth track.

This article first appeared on GuruFocus .