Recently, chip giant Broadcom (AVGO) launched its Edge AI broadband portfolio, including a 50G PON gateway system-on-chip with an integrated neural processing unit and Wi-Fi 8 fixed wireless access (FWA) support, bringing fast, secure, and intelligent processing to the edge for smart homes and enterprise applications.
Broadcom is working with partners, including Samsung and various telecom operators, to offer a silicon and software portfolio that creates a joint solution between the hyperscale data center and network edge. This is an effort to deliver the underlying hardware that can finally enable network operators to monetize their extensive fiber and 5G infrastructure investments through distributed AI services.
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Wall Street welcomed this news by sending Broadcom’s stock higher ahead of its Q2 FY2026 (to be reported on June 3, after the market closes).
About Broadcom Stock
Broadcom is a global technology company based in Palo Alto, California, with a market capitalization of roughly $2.3 trillion. It designs and delivers semiconductor and infrastructure software solutions serving data centers, networking, broadband, wireless, storage, and industrial sectors.
Its semiconductor division produces custom AI accelerators and networking chips that power AI clusters, while its software arm focuses on VMware's enterprise cloud and virtualization platforms.
A number of factors have propped up Broadcom’s stock. The company is facing explosive demand for its custom AI accelerators, as hyperscalers order custom chips. VMware’s acquisition also diversified revenue into infrastructure software, and CEO Hock Tan’s decision to stay through 2030 boosted investor confidence.
Over the past 52 weeks, Broadcom’s stock gained 88.33%, while it has been up 39.76% year-to-date (YTD). It reached an all-time intraday high of $488.82 on June 2, but is down a marginal 0.7% from that level.
www.barchart.com On a forward-adjusted basis, Broadcom’s price-to-earnings (non-GAAP) ratio of 42.38 times is higher than the industry average of 26.65x.
Broadcom Q1 Earnings Hit Record High as AI Revenue Soared
In the last reported period (quarter ended Feb. 1), Broadcom’s revenue reached a record for the first quarter. The company’s revenue increased 29% year-over-year (YOY) to $19.31 billion, exceeding the $19.29 billion expected by Wall Street analysts.
This was primarily based on Q1 AI revenue growing 106% YOY to $8.40 billion, reflecting solid demand for its custom AI accelerators and AI networking. Its non-GAAP EPS also surged 28% annually to $2.05, surpassing the $2.04 expected by analysts.
Broadcom expects this robust momentum to continue in the quarterly results to be reported. The company anticipates revenue to increase 47% YOY to $22 billion, with an adjusted EBITDA margin of 68%. AI semiconductor revenue is expected to be $10.70 billion in the second quarter.
Wall Street analysts are optimistic about Broadcom’s future earnings. They expect the company’s EPS to climb by 51.9% YOY to $2.02 for Q2 FY2026. For fiscal 2026, EPS is projected to surge 76% annually to $9.91, followed by a 66.6% growth to $16.51 in fiscal 2027.
What Do Analysts Think About Broadcom’s Stock?
Recently, analysts at Morgan Stanley maintained a bullish “Overweight” rating on Broadcom’s stock, while raising the price target from $470 to $485. This reflects robust positive sentiments for Broadcom’s stock, prior to its quarterly earnings.
Last month, Susquehanna analyst Christopher Rolland raised Broadcom’s price target from $450 to $490, while maintaining a “Positive” rating for the stock, expecting custom XPU momentum to continue amidst TPU strength.
In the same month, UBS raised AVGO’s price target from $475 to $490, while keeping a “Buy” rating. This was because UBS analysts expect higher margins from the changes in Anthropic’s order. Although the revised deal accounts for roughly 25% of the initially anticipated revenue, it is projected to deliver significantly higher profit margins.
Wells Fargo analysts maintained an “Overweight” rating on the stock and raised the price target from $430 to $545, citing a new model indicating AI chip demand may exceed consensus expectations.
Wall Street analysts are strongly bullish on Broadcom’s stock, with a consensus “Strong Buy” rating. Of the 42 analysts rating the stock, a majority of 34 analysts have given it a “Strong Buy” rating, three analysts suggested “Moderate Buy,” while five analysts are playing it safe with a “Hold” rating. The current trading price sits just above the consensus price target of $484.54. The Street-high price target of $630 represents a 29.7% potential upside.
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www.barchart.com On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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