Broadcom is heading into its fiscal Q3 earnings report on September 2 with Wall Street firmly in its corner. AVGO stock was trading around $371.54 ahead of the report, up 4.49% on the day.
Analysts expect earnings per share of $3.22, a 90.5% jump year-over-year. Revenue is forecast at $29.24 billion, up 83.3%.
Susquehanna analyst Christopher Rolland reiterated a Buy rating with a $490 price target. He expects a “generally in-line-to-slightly-positive quarter,” driven by AI networking and software businesses.
Rolland flagged supply constraints on advanced process nodes as a potential limiter for near-term AI processor upside. But he remains bullish on Broadcom’s custom chip business overall.
The broader Wall Street view backs that up. AVGO carries a Strong Buy consensus from 24 Buys and three Holds. The average price target of $511 implies roughly 37.5% upside from current levels.
Broadcom’s biggest revenue engine is the custom AI chips it develops with Alphabet, known as Tensor Processing Units. Alphabet has raised its capex budget to between $195 billion and $205 billion, with plans to increase it further next year.
Anthropic has placed $21 billion in TPU orders with Broadcom, and the three companies have signed a long-term commitment agreement. Broadcom books the chip revenue while Alphabet collects a licensing fee.
Broadcom remains Alphabet’s primary partner for its flagship training chip, giving it a durable position in that pipeline.
Beyond TPUs, Broadcom recently co-developed OpenAI’s new Jalapeño inference chip. In early tests, the chip outperformed Nvidia’s Blackwell chips and TPUs. OpenAI plans to deploy Jalapeño in its data centers before year-end.
Broadcom has secured a $200 billion deal with Samsung Electronics for high-bandwidth memory, manufacturing, and advanced packaging through 2030. It has also locked in advanced node capacity with Taiwan Semiconductor Manufacturing.
HBM access is a real competitive advantage. Nvidia has tied up much of SK Hynix’s capacity, AMD has secured Samsung supply, and Micron’s HBM output is roughly a third of its Korean rivals. Room for new entrants is limited.
Broadcom is also a key player in optical networking, which is growing fast inside AI data centers. It leads in optical DSPs and co-packaged optics, integrating optical receivers directly into its custom chips.
With a forward P/E of around 18 based on fiscal 2027 estimates, the stock looks reasonably valued given the growth on the table.
Public companies and individual investors own 33.13% of AVGO. Vanguard holds the largest institutional stake at 8.71%.
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