Broadcom Inc.

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Somewhat Bullish +45

Broadcom sees bullish views at Susquehanna ahead of Q2 results

AI-generated analysis

📈 Susquehanna Global Equity Research raised its price target for Broadcom (AVGO) to $490 from $450 ahead of the Q2 earnings report.

👍 The firm maintained its "Positive" rating on the stock while awaiting results scheduled for June 3, 2026.

💹 Analysts expect better-than-expected fiscal second quarter results despite concerns about guidance for the third quarter.

⚠️ Susquehanna described Broadcom's fiscal Q3 guidance as potentially "modest" following changes in AI order structures.

🤖 Demand for custom ASICs and AI networking remains strong, continuing to support positive revenue growth expectations.

📉 Anthropic's TPU order restructuring now excludes rack-level revenue, reducing Broadcom's 2026 AI revenue estimate from $62.5B to $55B.

🚀 Long-term projections remain robust, with 2027 AI revenue expected to exceed $100B despite the near-term adjustment.

⚖️ The semiconductor segment continues to show momentum, balancing risks from supply constraints and broadband competition.

📱 Storage connectivity and iPhone demand are identified as potential upside drivers for Broadcom's broader business lines.

📅 Broadcom will officially present its fiscal Q2 results on June 3, 2026, following the analyst adjustments at Susquehanna.

Bullish Signals
  • Susquehanna raised Broadcom's (AVGO) price target to $490 from $450 ahead of the Q2 report, reflecting bullish sentiment.
  • The firm maintained its Positive rating on the stock, signaling continued confidence in AVGO's prospects.
  • Demand for custom ASICs and AI networking remains strong, supporting positive revenue growth.
  • Broadcom sees momentum in key business lines including ASICs and networking.
Risk Factors
  • Susquehanna moderated Broadcom's fiscal third quarter guidance expectations despite raising the price target, indicating potential near-term earnings volatility.
  • Anthropic's TPU order structure changes now exclude rack-level revenue, which lowers Broadcom's total AI revenue estimate for 2026 from about $62.5B to $55B.
  • Supply constraints and competition in broadband present ongoing headwinds that could impact growth in Broadcom's broader business lines.
  • The reduction of the 2026 AI revenue forecast highlights sensitivity to key customer order structures, which introduces downside risk to long-term guidance.
Full Analysis
Susquehanna Financial Group upgraded its outlook on Broadcom Inc. (AVGO) ahead of the company's second-quarter fiscal earnings report scheduled for June 3, raising its price target from $450 to $490 while maintaining a Positive rating on the stock. The analyst firm expects Broadcom to deliver better-than-anticipated Q2 results, driven by robust demand for custom application-specific integrated circuits (ASICs) and AI networking solutions. However, Susquehanna noted that guidance for the fiscal third quarter is anticipated to be modest, reflecting near-term headwinds in certain segments. The primary concern highlighted involves changes in order structures from artificial intelligence partner Anthropic, which now excludes rack-level revenue from its TPU orders, leading analysts to adjust Broadcom's 2026 AI revenue estimate downward from approximately $62.5 billion to $55 billion. Despite this short-term reduction in visible AI revenue for the near term, projections for 2027 remain robust, with estimates staying above $100 billion as demand is expected to continue scaling across the industry. Beyond the AI sector, the article identifies broader business opportunities and risks for Broadcom. While the company continues to see strong momentum in ASICs and networking hardware, it must navigate supply constraints and face increasing competition within the broadband infrastructure market. Conversely, there remains potential upside from growth in storage connectivity solutions and sustained demand related to Apple's iPhone hardware refreshes. Overall, the analyst view balances immediate revenue recalibrations with long-term confidence in Broadcom's position as a key enabler of the artificial intelligence infrastructure buildout.