Broadcom (AVGO) closed Tuesday’s session up more than 1% at $389.32, bucking a broader softness in tech. Two things drove the move: a rotation out of software stocks and a fresh bullish note from Morgan Stanley.
The software selloff was triggered by IBM’s early release of its Q2 numbers. IBM warned that both revenue and non-GAAP net profit would miss analyst estimates.
IBM’s CEO Arvind Krishna pointed to a shift in client spending. Customers were moving money toward storage, memory, and servers rather than software, partly to get ahead of expected price increases tied to AI infrastructure buildouts.
That spending shift put hardware makers like Broadcom in focus. The company makes custom AI chips and AI networking silicon, putting it squarely in the path of that spending.
AVGO is up only 13% year-to-date, trailing several chip peers. The underperformance has largely come down to one debate: how much of Google’s TPU chip business will go to MediaTek rather than Broadcom.
Morgan Stanley analyst Joseph Moore addressed that concern directly. He reiterated his Overweight (Buy) rating on AVGO with a price target of $502, saying “AVGO remains a core AI winner.”
Moore acknowledged that MediaTek does have a real foothold in Google’s TPU work. Google has reasons to reduce dependence on any single supplier, and there is a credible 3nm TPU opportunity for MediaTek.
But Moore doesn’t see it as a serious threat. He expects Broadcom to hold around 80% of Google’s TPU supplier business over time. He called fears of AVGO’s share dropping to 50% or being displaced entirely “premature.”
His reasoning: Broadcom has advantages in high-bandwidth memory supply, packaging capabilities, and scale that are hard to replicate quickly.
Moore also pointed out that Broadcom has several new ASIC customers ramping up in the second half of 2027. That gives the company growth legs beyond the Google relationship.
Moore is not alone in his view. Wall Street’s overall consensus on AVGO is Strong Buy, backed by 23 Buy ratings and just three Hold ratings.
The average price target sits at $513.29, implying around 32% upside from current levels.
Moore ranks Broadcom as a close number two in AI chips behind Nvidia, driven by its ASIC dominance and networking business.
The stock’s day range on Tuesday ran from $384.71 to $397.24. Its 52-week range sits between $273.00 and $495.00, giving a sense of how far it has pulled back from recent highs.
Morgan Stanley’s note was the most recent analyst action on the stock, published July 15, 2026.
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