UBS Reiterates Buy on Broadcom, $475 Price Target (Feb 10)

UBS analyst Timothy Arcuri reiterated a Buy rating and $475.00 price target on Broadcom Limited (NASDAQ: AVGO).

“As LLM developers push their custom ASIC roadmaps more aggressively, many have turned to TPU as an intermediate alternative to GPU and we believe demand is accelerating significantly.

Following a series of supply chain work, we have refined our bottom-up custom ASIC model and now see AVGO shipping >5MM TPU units in C2027E (versus ~3.7MM in C2026E), of which a little more than half will be v7 (Ironwood) before v8ax (Sunfish) becomes the majority of shipments in C2028E.

Both of these are N3 based, where we believe AVGO is able to meet upside with strong wafer allocation from TSMC.

Our bottom-up assumptions for both AVGO and MediaTek TPU shipments are laid out in Figure 9.

We now model AI revenue of ~$60B for F2026E (up ~200% Y/Y), increasing to ~$106B (up ~80% Y/Y) in F2027E and ~$150B in F2028E.

Of our custom compute revenue, we see Google accounting for ~$30B this year and ~$56B in C2027E with Anthropic’s racks representing the bulk of the remaining TPU revenue together with a small portion to META.

We expect AVGO to start shipping OpenAI’s ASIC late this year and Anthropic’s ASIC in 2H:27.

On the back of this, our EPS for C2026/2027/2028E is now ~$12.70/~$18/~$22.50 and our PT remains $475 and we remain Buy.”

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