AVGO is soaring after an earnings beat. What Wall Street analysts are saying
Broadcom’s fiscal third-quarter report is being well-received by Wall Street analysts, several of whom lifted their price targets on the chipmaker. The chipmaker on Thursday posted better-than-expected quarterly earnings and revenue along with robust guidance for the current quarter. The company, which develops chips for Google and other cloud customers, also said it secured $10 billion in orders from a new client for custom chips. Shares popped more than 8% in premarket trading. “This performance puts Broadcom on track to drive ~$20B in AI revenues for FY25,” wrote JPMorgan analyst Harlan Sur. “Overall, we are encouraged by Broadcom’s strong visibility into FY26/FY27 AI revenue and a record $110B backlog, supported by robust cloud/hyperscaler capex trends, ongoing AI training and inference workloads, the ramp of Google’s next-gen TPU v6/v7 3nm AI accelerator ASICs, new customer/program ramps … and strong demand for AI networking.” Questions are now swirling among analysts and investors about Broadcom’s mystery client — and what that means for the company’s strength in the coming years as it tries to take market share from Nvidia . Take a look at what several analysts had to say. Bank of America: reiterated buy rating, lifted price target by $100 to $400 “Reiterate Buy, our top pick as AVGO’s custom AI chip (XPU) continues to build with a fourth large customer (OpenAI per media reports) likely joining the current three (Google, Meta, ByteDance.) The ~$10bn addition (in 2HFY26E) to prior FY26 growth now puts AI growth closer to 110% YoY vs. 55-60% YoY prior. Further, AVGO suggested growth could accelerate further into FY27E on additional programs, new customers,” analys Vivek Arya said. “While we agree AVGO is taking more share, we believe the AI pie could just be getting bigger in-line with NVDA’s commentary (“multi $trillion” TAM.)” Barclays: kept overweight rating, raised price target by $135 to $400 “Outside of the new customer, the core 3 ASIC customers are also doing better than expected and likely surpass the 60% Y/Y AI revenue target even before the new customer layers in … Outside of ASICs, the company is currently short on EMLs (explains transceiver constraints) and is doubling capacity over the next 9 months. The company is firing on all cylinders with clear line of sight for growth supported by significant backlog,” analyst Tom O’Malley said in a note to clients. JPMorgan: kept overweight rating, changed price target to $400 from $325 “Broadcom reported better-than-expected results for the Jul- Qtr and provided solid revenue outlook for the Oct-Qtr, driven by accelerating AI demand, stabilizing non-AI semiconductors, and continued solid momentum from VMware … Broadcom’s diversified portfolio and product cycles support a solid revenue growth profile,” analyst Harlan Sur wrote in a note. Morgan Stanley: reiterated overweight rating, raised price target from $357 to $382 “Upside to overall numbers is modest, but AI stays strong. More importantly, the company is putting a 4th AI customer into backlog, with the surprising forecast of $10 bn of incremental 2h revenue,” analyst Joseph Moore said. “While Broadcom has said that all three of their initial customers are on track, we do believe that the third customer is in China, could be subject to export constraints, and has seen some implementation delays.” Goldman Sachs: reiterated buy rating, lifted price target by $20 to $360 “We believe the most significant development was Broadcom’s announcement that it has converted another new custom silicon customer focused on inference, which is expected to help drive ‘material’ upside to management’s prior expectation of AI Semiconductor revenue growth of ~60% in 2026 … we see the company remaining the leader in AI custom compute and merchant networking silicon (which is likely to grow in importance), and we believe the company’s enterprise software portfolio is under-appreciated,” analyst James Schneider said. Wells Fargo: kept equal weight rating, lifted price target by $90 to $345 “AVGO delivered another solid beat-and-raise w/ continued custom AI XPU momentum – most notably highlighting $10B+ order from new (4th) customer for inference-focused XPU; accelerating AI growth in FY26 and again in FY27 (vs. +62% y/y in FY25),” analyst Aaron Rakers wrote in a note. “We continue to see shares representing a balanced risk/reward at current levels with significant leverage and an expectation that future acquisitions will remain a use of capital keeping us on the sidelines.” Deutsche Bank: kept buy rating, raised price target by $50 to $350 “While AVGO’s report/guide were relatively in-line on the surface, the all-important AI commentary was decidedly more bullish,” analyst Ross Seymore said. “When combined with a slowly improving non-AI semi segment and a steady software segment, we expect AVGO to deliver ~+40% revenue growth in FY26, with opex control yielding strong EPS fall through. In total, AVGO’s report/guide and long-term outlook highlight its leadership position in AI XPU compute/networking, with the steady hand of CEO Hock Tan continuing to steer this growth through the end of the decade (extended his contract through 2030). “
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