Shares of Broadcom Inc (NASDAQ:AVGO) tanked in early trading on Thursday, despite the company reporting upbeat fiscal third-quarter results
Here are some key analyst takeaways:
- Rosenblatt Securities analyst Sajal Dogra reiterated a Buy rating, while raising the price target from $500 to $600.
- Cantor Fitzgerald analyst C.J. Muse maintained an Overweight rating, while lifting the price target from $525 to $600.
- KeyBanc Capital Markets analyst John Vinh reaffirmed an Overweight rating and price target of $575.
- JPMorgan analyst Harlan Sur maintained an Overweight rating and price target of $580.
Check out other analyst stock ratings.
Rosenblatt Securities: Broadcom indicated that it had secured sufficient supply to support AI revenues of around $115 billion in fiscal 2027 and $230 billion in fiscal 2028, Dogra said in a note. Demand remains above the company’s guidance. But “power, shell readiness and physical deployment” constrains the outlook.
Upside to this outlook would depend on “Broadcom’s ability to unlock additional supply capacity and on customers completing their data-center deployments on schedule,” the analyst wrote. This creates a “longer and stronger revenue pipeline” for the company as roughly 30GW is deployed through fiscal 2028 and beyond, he further stated.
Cantor Fitzgerald: Broadcom raises its AI revenue guidance for fiscal 2027 to $115 billion, from the prior outlook of over $100 billion. Buy-side expectations were as high as $140 billion. Still, the company remains “severely supply-constrained.”
Broadcom set the fiscal 2028 AI revenue guide at $230 billion, implying total fiscal 2028 revenue of around $285 billion, about $50 billion above consensus, Muse said. Led by this strength, management guided to fiscal 2028 earnings to exceed $30 per share, versus consensus of $26.38 per share, he further stated.
KeyBanc Capital Markets: Broadcom reported revenue of $29.6 billion and earnings of $3.32 per share, topping consensus estimates of $29.2 billion and $3.22 per share, respectively, Vinh said. AI revenues grew 221% year-on-year and 54% sequentially to $16.7 billion, with XPU revenues up 250% year-on-year and networking up more than 150% year-on-year, he added.
Management guided fiscal fourth-quarter revenue at $34.8 billion, in line with expectations, implying earnings of $3.79 per share, below the consensus of $3.85 per share, he noted.
JPMorgan: Broadcom expects AI semiconductor revenue to double from around $58 billion in fiscal 26 to about $115 billion in fiscal 2027 and then double again to approximately $230 billion in fiscal 2028, Sur said. This outlook is both strong and conservative, with demand “running above those levels, he added.
Assuming Broadcom’s outlook embeds a similar level of supply constraint as NVIDIA Corp (NASDAQ:NVDA), this points to demand of over $145 billion in fiscal 2027 and over $270 billion in fiscal 2028, the analyst stat4ed. The “strong positive” was Broadcom’s AI customer diversification, which includes Alphabet Inc (NASDAQ:GOOGL), Meta Platforms Inc (NASDAQ:META), Anthropic, OpenAI, and others, he further noted.
AVGO Price Action: Shares of Broadcom had declined by 5.44% to $347.27 at the time of publication on Thursday.
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