BNP Paribas Exane Raises Broadcom Price Target to $640

BNP Paribas Exane analyst Karl Ackerman raised the price target on Broadcom Limited (NASDAQ: AVGO) to $640.00 (from $600.00) while maintaining a Outperform rating.

“Broadcom’s stock is down ~14% AHs on limited near-term upside from AI sales and lower GMs.

We believe this is shortsighted as AI compute and networking AI orders continue to accelerate that now supports visibility through ’28.

Additionally, we are confident in Broadcom’s ability to maintain operating leverage as AI sales ramp. As such, we raise our estimates and our TP from $600 to $640.

Broadcom reported FQ2:26 rev/EPS of $22.2B/$2.44 (0%/2% above) and guided FQ3:26 rev/implied EPS of $29.4B/$3.25 (3%/3% above).

AI sales came in below consensus for both the JulQ ($16B vs. cons $17.2B) and FY26 sales ($56B vs cons $57.6B), which we attribute to Broadcom solely recognizing AI silicon sales from Anthropic.

Nonetheless, we think momentum continues to build with FQ2 AI bookings of $30B, nearly 3x larger than AI sales of $10.8B, which supports FY27 AI sales ‘well above’ $100B and further growth in FY28.

On margins, Broadcom guided FQ3 GMs down ~310bp Q/Q to 74% due to higher semiconductor mix, yet the company expects to maintain strong operating leverage with 67% OpM.

Other notable items: 1) Broadcom entered into a financing agreement with Blackstone and Apollo to collectively deploy 20GW of compute capacity through 2028; 2) Infrastructure Software is guided to grow 24% Q/Q to $8.9B in FQ3 on agentic AI adoption, which we expect to support OpMs; and 3) Broadcom expects ESUN adoption starting in 2H of CY26.”

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