AVGO: Multi-Year Artificial Intelligence Partnerships Will Drive Market Momentum Ahead

Broadcom's analyst price target has risen by over $20, as analysts cite strengthened revenue expectations and multi-year upside from high-profile artificial intelligence partnerships and recent OpenAI collaboration announcements.

Analyst Commentary

Broadcom's recent partnership announcements and accelerated artificial intelligence momentum have drawn wide attention from industry analysts, leading to a wave of adjustments in price targets and outlooks. The following summarizes the key viewpoints driving analyst sentiment.

• Bullish analysts highlight upward revisions in price targets. This reflects increased confidence in Broadcom's AI-driven revenue trajectory and execution on large-scale projects.
• The company's multi-year collaboration with OpenAI is seen as a significant milestone. This supports higher long-term earnings per share projections, with some forecasts suggesting EPS could more than double by 2028.
• Strong demand for custom AI accelerators and systems positions Broadcom as a leader in next-generation infrastructure. Analysts expect growth in customer diversification and large deployment opportunities starting in the second half of 2026.
• Broader AI market momentum is prompting analysts to raise revenue estimates. New deals are estimated to bring in substantial multi-year revenue flows and further strengthen Broadcom's competitive position against major peers.

• Bearish analysts raise concerns about increased competitive risks for Broadcom from rival partnerships in the AI compute space, particularly involving Nvidia and AMD. These risks could pressure margins or market share over time.
• There is caution regarding potential shifts in market dynamics, as government policy changes or supply chain complexities may introduce volatility for both Broadcom and its customers.
• Some analysts question whether the large-scale AI deployments will translate into durable, high-margin revenue streams, given shifting demand patterns, evolving technology, and pricing pressures on custom silicon solutions.

What's in the News

• OpenAI is partnering with Broadcom to begin mass production of its own artificial intelligence chips starting next year. This move aims to reduce reliance on Nvidia. (Financial Times)
• Apple has introduced its in-house N1 wireless networking chip for the entire iPhone 17 lineup, decreasing its dependence on Broadcom for wireless components. (DigiTimes)
• Broadcom is advancing development of custom AI accelerators and systems for OpenAI. New racks powered by Broadcom networking are expected to deploy across multiple data centers.
• OpenAI plans to utilize its co-designed AI chips with Broadcom internally for key generative AI workloads instead of releasing them to the broader market.

Valuation Changes

• The Fair Value Estimate has risen slightly from $392.38 to $394.82, reflecting marginal upward adjustments in valuation assumptions.
• The Discount Rate has increased from 10.24% to 10.68%, suggesting analysts see a mildly higher risk or required return profile for Broadcom.
• The Revenue Growth projection has edged up from 29.89% to 29.96%, indicating a modest improvement in anticipated top-line expansion.
• The Net Profit Margin forecast has dipped slightly from 44.15% to 44.08%, implying negligible changes to expected profitability.
• The Future P/E Ratio estimate has risen from 43.78x to 44.57x, indicating a small uptick in forward valuation expectations.