Broadcom (AVGO) Stock: Top Analyst Raises Price Target on AI Outlook

Key Points:

Broadcom reported fourth-quarter earnings that exceeded Wall Street forecasts, driven by a sharp increase in artificial intelligence chip sales. The semiconductor company posted AI revenue of $6.5 billion for the quarter, representing a 74% jump compared to the same period last year.

Broadcom Inc., AVGO

The company announced it has built up a $73 billion order backlog. This figure reflects strong demand from major technology companies purchasing AI semiconductors.

AI Revenue Projections Continue to Climb

Broadcom provided guidance for the first quarter of fiscal 2026, projecting AI revenue will reach $8.2 billion. This forecast indicates the company expects continued growth in its AI semiconductor business.

For the full fiscal year 2025, Broadcom is on track to generate nearly $20 billion in AI revenue. The company’s AI business has become a major contributor to its overall financial performance.

The earnings report showed that demand from hyperscalers—large cloud computing providers like Amazon, Microsoft, and Google—remains strong. These companies are building out massive data centers to support AI applications and services.

Broadcom manufactures custom AI chips and networking products that connect servers in data centers. The company competes in a market where demand for AI infrastructure has grown rapidly over the past two years.

Wall Street Responds with Higher Price Target

Following the earnings announcement, JPMorgan Chase raised its price target for Broadcom stock to $475 per share. The investment bank cited the company’s 65% year-over-year growth in AI revenues as justification for the increase.

JPMorgan maintained its Overweight rating on the stock. The bank’s analysts named Broadcom as one of their top picks in the semiconductor sector.

The price target adjustment reflects analyst confidence in Broadcom’s ability to maintain its position in the AI chip market. Investment banks typically raise price targets when they believe a company’s earnings will continue to grow.

Broadcom’s results come as semiconductor companies report varied performance depending on their exposure to AI markets. Companies with strong AI product lines have generally outperformed those focused on other chip categories.

The company’s fourth-quarter performance beat analyst estimates on both revenue and earnings per share. Broadcom did not disclose specific earnings per share figures in the available reports.

Hyperscaler customers are placing large orders months in advance to secure chip supplies. This ordering pattern has helped Broadcom build its substantial backlog.

The $8.2 billion AI revenue projection for Q1 2026 would represent continued sequential growth from the $6.5 billion reported in Q4. Broadcom has not provided detailed breakdowns of which product categories are driving the AI revenue growth.