HSBC Reaffirms Buy on Broadcom, $535 Price Target

HSBC analyst Frank Lee reiterated a Buy rating and $535 price target on Broadcom Limited (NASDAQ: AVGO).

“ASIC momentum improving further but not fully priced in: In our 24 November note, we argued that the street was undervaluing the ASIC opportunity and we remain much more bullish given continuous CoWoS capacity expansion amid the TPU momentum from Alphabet.

Alphabet launched its Gemini 3 model on 18 November, which has been completely trained using TPU (compared to its models traditionally being trained using GPUs and TPUs being used for internal workloads only).

This has boosted market sentiment as TPU is now being viewed as an alternative to GPUs. This has led to a Broadcom share price rally of +15% (vs S&P 500 +4%) since the Gemini 3 launch.

Though the street has raised its FY26e/FY27e ASIC revenue estimates by 5%/14% since the Gemini 3 launch date, our ASIC revenue estimates (unchanged) remain 38%/40% above the street.

Given the improving ASIC momentum, we believe management is likely to raise its ASIC revenue guidance again at its 4QFY25 earnings call.”

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