Cantor Fitzgerald Reiterates Overweight on Broadcom, $525 Price Target

Cantor Fitzgerald analyst C.J.

Muse reiterated an Overweight rating and $525 price target on Broadcom Limited (NASDAQ: AVGO).

“Broadcom offered a solid report overnight with a strong beat for the October Q and more modest raise for the January Q (partially weighed down by higher tax rate guide for all of FY26).

More importantly, mgmt disclosed $73B of AI backlog (including $53B custom silicon) to be revenue over the next 6 quarters with mgmt indicating lead times of 6-12mos support additional upside to this number.

Broadcom also announced a 5th customer with delivery of $1B custom silicon in 4QFY26 (emphasized as more traditional hyperscale customer doing own XPU and not OAI) which brings total customers to now truly 6 when including OAI (Google, Anthropic, META, Bytedance, OAI).

Adding this up, we estimate that AI Semiconductor revenue will grow by more than 100% in CY26 supporting EPS of at least $10.70 (cons $10.31), if not higher, with continued growth expected in CY27E leading to our EPS of $13.50 (cons $13.14) and stretch goal of $15 absolutely intact.

As for potential concerns, mgmt discussed pass-through of HBM/rack scale components that will weigh on custom silicon GMs, though we would note that the only current customer taking full racks is $21B order with Anthropic.

There was perhaps some confusion around the OAI ramp, which mgmt highlighting the 10GW investment as a FY27-29 story.

Customer Owned Tooling remains an ongoing investor worry though we continue to believe Broadcom’s vast IP portfolio across SerDes/ Networking will sustain very strong share in custom silicon (though we do believe mgmt could have done a better job addressing this question on the call).

Finally, the non-AI Semi business was guided to track relatively flattish in FY26, which is clearly much worse than what competitors are seeing – begging the question whether mgmt is simply being conservative or whether something has happened in one of the businesses.

Put it all together and given our very bullish outlook for AI Infrastructure spending absolutely intact, we reiterate our Overweight rating and our $525 price target. Broadcom remains a Top Pick.”

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