Barclays reiterates Broadcom stock rating on AI revenue outlook
Mizuho maintains an Outperform rating and $530 price target for Broadcom (NASDAQ:AVGO) amid strong AI revenue growth forecast. Analysts project Broadcom's AI revenue to surge 100% year-over-year for fiscal years 2027 and 2028, reaching $115 billion and $230 billion respectively. The company's current stock price of $367 is considered undervalued relative to its fair value, according to InvestingPro analysis.
Broadcom reported in-line results for Q2 and Q3 but emphasized a 100% YoY AI revenue growth for fiscal years 2027 and 2028. The semiconductor giant's gross profit margins stood at 76% in the last 12 months. Broadcom anticipates supply constraints in LPS, memory, and advanced packaging. The company highlighted significant XPU ramps for AI chip customers like Anthropic, OpenAI, and Meta, with expected XPU shipments of approximately 16, 6, and 3 gigawatts respectively by fiscal years 2026 to 2028.
Broadcom’s networking products, including TH Ultra and TH7 200T switch, are expected to maintain a majority share in Google TPU volumes. Despite differing analyst targets, all firms maintain positive ratings on Broadcom's stock, underscoring its potential in the AI semiconductor market.
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