Update shared on27 Aug 2025
Fair value Increased 1.60%Broadcom’s consensus price target has risen modestly to $302.16, driven by accelerating AI demand, strong custom silicon momentum, improved China access, and sustained AI pipeline growth, offsetting margin pressure from higher AI mix.
Analyst Commentary
- Bullish analysts are raising estimates and price targets reflecting Broadcom's accelerating artificial intelligence (AI) demand, with AI-driven revenue growth guided 60% year-over-year into fiscal 2026.
- Strong momentum in custom silicon (ASICs) and increasing AI inference/training pipeline visibility are highlighting Broadcom’s leadership and secular growth in the core semiconductor and infrastructure software segments.
- U.S. regulatory changes allowing AI accelerator shipments to China have reopened a significant $50B+ end market, providing a meaningful tailwind for AI-related revenues and supporting growth forecasts.
- Near-term results and guidance have been in line or modestly ahead of expectations, with strong AI strength offsetting softer trends in legacy semiconductor categories, while margins are guided lower due to increased AI semiconductor mix and higher options expenses.
- Despite some investor disappointment around incremental AI upside and unchanged long-term total addressable market estimates, analysts believe there is considerable headroom for future upward revisions and advise buying on near-term weakness given meaningful customer additions and robust multi-year AI growth visibility.
What's in the News
- Broadcom launched multiple major innovations in AI infrastructure, notably shipping the Tomahawk 6 and Tomahawk Ultra Ethernet switches (enabling unprecedented bandwidth and sub-microsecond latency for next-gen AI clusters), as well as Jericho4, a fabric router designed for super-scale, lossless AI networking (Key Developments).
- Broadcom strengthened its enterprise platform leadership by rolling out VMware Cloud Foundation (VCF) 9.0 and making VMware Private AI Services standard; these enhancements drive secure, unified AI-native private clouds, with strong customer adoption (including nine of the top ten Fortune 500 companies) and deep integration with NVIDIA and AMD for enterprise AI workloads (Key Developments).
- The company deepened AI and cloud ecosystem partnerships: expanded alliances with Canonical to accelerate secure AI/cloud app deployment, integrated the latest NVIDIA Blackwell GPUs and DPU networking for VCF, and validated PCIe 6.x interoperability with Synopsys to enable high-performance computing expansion (Key Developments).
- Broadcom introduced new security and compliance innovations, announcing advanced cyber resilience, compliance automation, fileless malware detection, post-quantum cryptography, and zero trust enhancements across VMware Cloud Foundation, aimed at highly regulated sectors and protecting AI workloads (Key Developments).
- On the business/transactional front, MediaTek edged out Broadcom for Meta's 2nm ASIC order (DigiTimes), a $2.45B share repurchase was completed, the CEO sold $10.7M of stock, and revenue for FQ3 2025 was guided at $15.8B (Periodicals, Key Developments).
Valuation Changes
Summary of Valuation Changes for Broadcom
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $297.41 to $302.16.
- The Future P/E for Broadcom remained effectively unchanged, moving only marginally from 45.64x to 46.08x.
- The Consensus Revenue Growth forecasts for Broadcom remained effectively unchanged, moving only marginally from 20.1% per annum to 20.3% per annum.
Disclaimer
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