Broadcom stock reaches a new year-long peak.

• Broadcom shares jumped 9% Monday.
• One of many companies seeking to capitalize on the artificial intelligence growth is Broadcom.

On Monday, shares of the stock increased by 9% after Citigroup reinstated its coverage with a buy rating and raised its price target to $1,100. The stock closed at $1,029.24, its highest price in a year.

Citigroup resumed its coverage of the semiconductor and software company, citing "strength in the core business and accretion from the VMware acquisition," in a note to investors Monday morning. Broadcom bought VMware in November to enhance its cloud technology infrastructure that it sells to other businesses.

Broadcom is collaborating with companies such as and to develop chips and infrastructure for specific AI applications, including Google's custom tensor processing unit. However, it is not competitive with in providing the GPUs required for training advanced generative AI models, such as those used by OpenAI's GPT.

Citigroup's optimism is mainly due to its belief that Broadcom will profit from the growth of AI.

The analysts predict that sales from AI infrastructure will increase from $4 billion in F23 (11% of F23 sales) to over $8 billion in F24 (17% of F24 sales).

Last Thursday, Broadcom reported strong earnings for its fiscal fourth quarter, resulting in a 2.4% increase in its shares to $944.30 at Friday's market close.

— CNBC’s Michael Bloom contributed to this report.