Morgan Stanley has a new favorite pick in the chip space

A Broadcom chip
David Paul Morris | Bloomberg | Getty Images

Concerns about Broadcom's recent acquisition of Symantec's enterprise software business are overblown and the stock is a compelling buying opportunity, Morgan Stanley told its clients on Tuesday.

Lead equity analyst Craig Hettenbach upgraded the stock to overweight from equal-weight and bumped his 12-month price target to $367 from $298, implying nearly 18% upside over the next year. Broadcom stock rose 2% in premarket trading Tuesday following the Morgan Stanley upgrade. Hettenbach calls it "our new top pick."

More In Pro News and Analysis

CNBC ProMorgan Stanley names stocks that will win as global shipping industry bounces back
CNBC ProHere’s how top international fund managers are navigating Covid spikes, chip shortages
CNBC ProThe stock market continues to keep sellers at bay, offering few reasons to fight the tape