BofA Raises Broadcom Price Target to $500

BofA Securities analyst Vivek Arya raised the price target on Broadcom Limited (NASDAQ: AVGO) to $500 (from $460) while maintaining a Buy rating.

“Reiterate Buy on our top pick, raise FY26/27E pf-EPS by 8% each (despite higher tax rate and mix-driven GM pressure) to $10.33/$14.40, raise PO to $500 from $460 on unchanged 33x CY27E P/E.

Stock sold-off post-market, perhaps due to some undue concerns around: 1) Backlog vs. bull-case expectations: $73bn (and growing) AI backlog vs. consensus at $69bn (next 6 qtrs) and vs. some bull-case expectations that could have been over $80bn.

AVGO’s backlog/order visibility continues to build, and management commentary suggests $50bn/$100bn in AI sales is possible in FY26/27, inline with bullcase pre call; 2) OpenAI project start date: we still assume more FY27 than FY26, good in a way as it derisks FY26 AI outlook.

The fifth customer AVGO added could potentially be Apple, in our view, given it’s a traditional customer with long-term agreement for largescale deployment; 3) GM pressure due to mix: fair concern and we lower our FY26/27E GM to 73%/71% vs.

75.4%/73.6% prior, but we believe opex can be maintained, keeping EBIT margins relatively steady; and 4) Premium valuation (vs. NVDA): 33x CY26 PE vs.

NVDA 24x, the widest gap ever, which tends to seasonally converge in CQ1.”

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