UBS Reiterates Buy on Broadcom, $475 Price Target

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

“Last week AVGO announced a new long-term agreement with Google extending through 2031, covering future generations of TPUs alongside a supply assurance agreement for networking and other critical rack-level components.

To some degree, this addresses a key investor concern around Google’s potential COT transition (particularly in light of MediaTek TPU volumes ramping this year), though even the bears we speak to still thought Google would rely heavily on AVGO through this timeframe.

At the same time, Broadcom, Google, and Anthropic expanded their collaboration, with Anthropic now set to access ~3.5GW of TPU-based compute beginning in 2027 (contingent on Anthropic’s continued commercial success).

In revenue terms, this lifts Anthropic-related TPU orders from ~3GW/~40B across C26–C27 to closer to ~$50B under this framework—largely consistent with our model (we model ~$53B of Anthropic revenue across C26–C27).

Taken together, we view these announcements incremental to the near-term TPU risk debate, but expect investors to still focus on ASIC diversification beyond TPU to de-risk the longer-term COT concerns which will continue to exist as MediaTek ramps.

From a modeling perspective, based on our own supply chain checks, we now think AVGO can ship closer to ~7MM TPUs in C27 versus our prior ~6MM estimate and we model AVGO’s revenues reaching $195B/$212B for F27/C27 from our prior ests of $182B/$195B.

Finally, our F2027 AI revenue is now $145B (vs prior $133B) – substantially above company guidance, but most investors we speak with are already expecting numbers in this ballpark.”

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