BofA Reaffirms Buy on Broadcom, $400 Price Target

BofA Securities analyst Vivek Arya reiterated a Buy rating and $400 price target on Broadcom Limited (NASDAQ: AVGO).

“Today’s announcement makes 3 important statements: 1) AVGO’s prior $10bn award announced during its last earnings call (for F3Q26) was NOT for OpenAI, but for a different customer, likely Anthropic, xAI or Apple, suggesting continued customer diversification, 2) AVGO now feeling more confident to pitch rack-scale solutions to customers – lower margin but much higher content (current XPU likely around $10K, while rack-scale with more advanced XPU, networking, rack et. potentially 2x the content opportunity, and 3) The strong OpenAI endorsement puts AVGO custom chips at a stronger footing versus NVDA and AMD.

We maintain our estimates and $400 PO, but now see some upside to our AVGO FY26/27 AI forecast of $41bn/$68bn (above cons. at $38bn/$52bn.

Further, if AVGO continues to scale then $100bn in AI sales by FY28 (vs. cons at $78bn) could potentially generate $16-$17/sh in pf-EPS (14% above cons).”

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