HSBC Keeps Buy on Broadcom, $400 Price Target

HSBC analyst Frank Lee reiterated a Buy rating and $400 price target on Broadcom Limited (NASDAQ: AVGO).

“Broadcom highlighted onboarding a new ASIC customer, its fourth, which would add an additional USD10bn in ASIC revenue in FY26e, raising overall FY26e ASIC revenue to USD30bn, in-line with our Street-high estimate of USD30.6bn as highlighted in our 29 August preview note.

We had expected that there would be upside to FY26e ASIC momentum given recent upward revisions to Broadcom’s FY26e CoWoS wafer allocation at TSMC from 120k to 150k, implying YoY growth of 81%.

However, we are also surprised by the announcement of an additional customer and earlier-than-expected FY26e ASIC revenue upward revision.

Although management’s latest FY26e ASIC guidance is now in-line with our estimates, our FY26e bull case scenario suggests as 26% increase in ASIC revenue from our base case revenue of USD30.6bn to USD38.5bn on the back of CoWoS consumption of 180k wafers.”

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