Shares of Singapore-based Broadcom Ltd. (AVGO) are trading up 2.6% Tuesday morning at $269.12 following President Donald Trump's move to block its $117 billion hostile takeover bid for rival Qualcomm Inc. (QCOM). Trump was reportedly acting on the recommendations of the Committee on Foreign Investment in the U.S., which vets deals for national security risks. (See also: Intel May Buy Broadcom to Protect Apple Franchise.)

In response to the news, bulls on the Street including analysts at firms including Cowen & Co., B Riley FBR, SunTrust Robinson Humphrey, Mizuho and RBC Capital all reiterating their buy ratings on the semiconductor stock, indicating that the tech firm is still a good investment and will stay active on the M&A front. The nixing of the merger also makes Qualcomm's planned acquisition of NXP Semiconductors NV (NXPI) more likely, according to a handful of analysts. Qualcomm investors are less positive on the announcement, sending shares down 4% to $60.28 on Tuesday morning. 

Cowen & Co. expects Broadcom's earnings, slated for March 15, to serve as the next potential catalyst for the company as Chief Executive Officer Hock Tan establishes a "clear strategic direction" for the chipmaker, as reported by Bloomberg. Cowen's Karl Ackerman, who rates AVGO at outperform, sees Broadcom's board as executing one of two options. The firm's board could decide to "reposition M&A efforts towards smaller, less needle-moving deals" or "meaningfully increase shareholder return," wrote the analyst, adding that "either way, we think AVGO's stock should work from here." Ackerman highlighted potential takeout targets including Xilinx Inc. (XLNX), Mellanox Technologies Ltd (MLNX). and Acacia Communications Inc. (ACIA). 

A Return to Normal?

B Riley's Craig Ellis expects AVGO stock to gain nearly 25% to $335 over 12 months, indicating that any "sentiment damage following the unsuccessful chase" should be short lived and that value creation could be secured through deals or more aggressive cash returns. 

“Investors have been cautious on AVGO since it first pursued QCOM owing to an anticipated lengthy regulatory approval process. With that issue out of the way, we expect AVGO to extend Monday’s rally today," wrote SunTrust Robinson Humphrey. Analyst William Stein does not expect the failed deal to signal the end of AVGO's M&A strategy, which he applauded as a driving force behind the semi maker's earnings growth. 

RBC, which maintains AVGO as a top pick, wrote that in absence of large deals, Broadcom "could become a more attractive capital allocation story." (See also: Tax Cuts Prompt Biggest Merger Spree in Decades.)