Macquarie Downgrades Broadcom to Neutral, $437 Price Target

Macquarie analyst Arthur Lai downgraded Broadcom Limited (NASDAQ: AVGO) from Outperform to Neutral, PT $437.00.

“We move to the sidelines as Google shifts toward insourcing. As noted in our prior ASIC thesis (see ASIC ecosystem report here), Broadcom was previously the only vendor in Google’s supply chain.

However, Google is now working with MediaTek (2454 TT, Outperform) and developing in-house capabilities (see our recent report dated here).

We expect Broadcom’s market share to decline meaningfully in 2027–28 and downgrade our rating from Outperform to Neutral. • Both upside and downside appear limited.

Upside is constrained by concerns over market share loss and potential margin pressure given increasing competition.

At the same time, downside risk is supported by valuation, with Broadcom trading at c.25x cycle-average P/E (historical avg since 2023) versus c.40x for global peers. • F2Q26 beat with strong guidance.

Broadcom reported F2Q26 rev of US $22.1bn, up c.48% YoY, with AI rev of US$10.8bn and guided to increase >200% YoY to US$16.0bn in FY3Q26.

For FY3Q26, mgmt guided rev to be ~US$29.4bn, indicating c.33% QoQ and c.84% YoY.

Short-term visibility remains strong with a US$30bn AI bookings added in FY2Q26, higher than rev recognised during the quarter, indicating a continuing trend of AI deployment”

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