Wells Fargo Upgrades Broadcom to Overweight, $430 Price Target

Wells Fargo analyst Aaron Rakers raised the price target on Broadcom Limited (NASDAQ: AVGO) to $430.00 (from $410.00) while upgrading to an Overweight rating (from Equal-weight).

“We think the recent pull-back in shares of Broadcom, coupled with increasing confidence in potentially meaningful incremental catalysts looking through 2026, gives us the opportunity to get constructive.

We increase our calendar 2026 and 2027 estimates for Broadcom from $97.0B / $10.36 and $130.5B / $13.90 to $100.3B / $10.80 and $143.8B / $15.35, respectively.

Our estimate increases reflect an increase in our Broadcom AI Semiconductor revenue estimates in calendar 2026 and 2027 from $52.0B (+113% y/y) and $83.8B (+61% y/y) to $52.6B (+116% y/y) and $93.4B (+78% y/y), respectively.

This now reflects AI Compute revenue at $36.6B (+131% y/y) and $66.2 (+81% y/y) and AI Networking revenue at $16.1B (+87% y/y) and $27.2B (+69% y/y), respectively.

We maintain a relatively flat calendar 2026 and 2027 revenue estimate for Broadcom’s aggregate non-AI semiconductor revenue.

We model Broadcom’s Infrastructure Software revenue in line with the company’s guidance of low double-digit y/y growth in FY26.

Broadcom exited FY25 with a ~$73 billion Infrastructure Software backlog, up from $49 billion exiting FY24.

From a margin perspective, we model Broadcom’s semiconductor GM% to decline to ~65% in our out year estimates (vs.

68.2% in FY25) to reflect systems contributions; we believe concerns over a material decline (sub-60% GM%) are overdone.

Our estimates reflect an expectation that Broadcom can maintain a ~65%+ EBITDA margin.”

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