Broadcom Inc.

(NASDAQ Global Select)
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Bullish +72

Broadcom Stock Could Be Approaching a Major Turning Point. Here’s the Price Target

AI infrastructure Analyst upgrade Company update AI-generated analysis

πŸ“ˆ AVGO stock trades 34% below its 52-week high despite fiscal Q4 revenue guidance of $34.8 billion, up 93% year over year.

πŸ’° Fiscal Q3 revenue reached $29.591 billion, beating the $29.44 billion consensus with non-GAAP EPS of $3.32.

πŸš€ AI semiconductor revenue exploded to $16.70 billion in Q3, marking a 221% increase from the prior year.

🀝 Broadcom established an AI financing platform with Apollo Global Management and Blackstone targeting over 20 gigawatts of compute for OpenAI and Anthropic.

πŸ“ˆ Analysts project AVGO AI revenue to hit $115 billion in fiscal 2027 and $230 billion in fiscal 2028.

🎯 CEO Hock Tan stated the company is on target to exceed $30 in earnings per share for fiscal 2028.

πŸ† Anthropic is projected to become Broadcom's largest XPU customer by 2027.

πŸ’° 24/7 Wall St. sets a price target of $405.37 with a buy rating and high confidence in the model.

⚠️ Gross margin guidance for Q4 is set at 73%, down from 78% a year ago due to memory-heavy XPUs.

πŸ“‰ AVGO trades at ~42x P/E, which analysts view as cheap compared to its 85% growth rate and NVIDIA's valuation.

πŸ’Έ The company carries $59.6 billion in gross fixed-rate debt but repaid $5.6 billion during Q3.

πŸ“‰ Shares fell 7.15% over the past month, trading 12.85% above its 52-week low of $288.95.

Bullish Signals
  • Fiscal Q4 revenue is guided at $34.8 billion, representing a massive 93% year-over-year increase.
  • AI semiconductor revenue surged 221% to $16.70 billion in fiscal Q3, significantly beating consensus estimates.
  • The company secured an AI financing platform with Apollo and Blackstone to power over 20 gigawatts of compute for major clients.
  • Management projects total AI revenue to reach $115 billion in fiscal 2027 and $230 billion in fiscal 2028.
  • CEO Hock Tan confirmed the company is on track to exceed $30 in earnings per share for fiscal 2028.
  • Analysts view AVGO's ~42x P/E multiple as cheap relative to its high growth rate and NVIDIA's valuation.
  • The stock trades 12.85% above its 52-week low, suggesting a potential bottoming out after recent volatility.
Risk Factors
  • Gross margin guidance for Q4 is set at 73%, down from 78% a year ago due to the growing share of memory-heavy XPUs.
  • Operating margins are guided near 66% as revenue increases much faster than expenses, potentially compressing profitability.
  • Customer concentration risk exists as a few leading research labs drive most AI demand and could delay deployments.
  • The company carries $59.6 billion in gross fixed-rate debt, creating leverage risks despite recent repayments.
Full Analysis
Broadcom (AVGO) is approaching a potential turning point as its share price lags significantly behind exploding AI fundamentals. Despite trading 34% below its 52-week high, the company guided fiscal Q4 revenue to $34.8 billion, representing a 93% year-over-year increase. Fiscal Q3 results further validated this strength with revenue of $29.591 billion beating consensus and AI semiconductor revenue surging 221% to $16.70 billion. Analysts at 24/7 Wall St. maintain a buy rating with a price target of $405.37, implying 24.32% upside from the current closing price of $326.08. The firm notes that AVGO's ~42x P/E multiple appears cheap relative to its 85% growth rate and NVIDIA's valuation, suggesting the market is overreacting to short-term volatility. Management projects AI revenue to reach $115 billion in fiscal 2027 and $230 billion in fiscal 2028. Key risks include margin dilution to approximately 73% in Q4 due to memory-heavy XPUs and customer concentration among leading research labs like Anthropic, which is expected to become the largest XPU customer by 2027. The company also carries $59.6 billion in gross fixed-rate debt, though it repaid $5.6 billion in Q3. Overall, the bullish case relies on continued execution of the custom accelerator roadmap and sustained hyperscaler spending.