Benchmark Raises Broadcom Price Target to $545
Benchmark analyst Cody Acree raised the price target on Broadcom Limited (NASDAQ: AVGO) to $545.00 (from $485.00) while maintaining a Buy rating.
“AVGO shares sold off by about 13% after-hours despite record 2Q results, a $0.04 EPS beat, and a Q3 revenue guide $1.15B above consensus, because the market was measuring the report against an elevated AI semiconductor bar rather than published estimates.
The immediate disappointment centered on four issues: Q3 AI semiconductor guidance of $16.0B was still >200% Y/Y growth but below Street’s $17.2B and likely below buyside expectations closer to $18.5B; the explicit FY26 AI semiconductor guide of $56B fell below Street’s $57.5B and higher buyside views near $60B; the FY27 AI semiconductor framework remained at >$100B rather than moving higher; and Q3 gross margin is expected to compress by roughly 300 bps sequentially as custom accelerators become a larger part of the mix.
We expect a further contributor to the stock’s weakness was management’s public acknowledgment that Google, Broadcom’s largest TPU customer, is expected to diversify its TPU supplier base as its own AI compute consumption expands.
While we believe this supplier-diversification to MediaTek issue has become widely expected and understood by industry followers, the call put the first formal management voice behind the broader investor concern.”
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