Cantor Fitzgerald Reiterates Overweight on Broadcom, $525 Price Target

Cantor Fitzgerald analyst C.J.

Muse reiterated an Overweight rating and $525.00 price target on Broadcom Limited (NASDAQ: AVGO).

“Despite a solid beat and raise, this was a disappointing report from Broadcom with less precise execution than what we have come to expect.

Here, we highlight 1) AI revenue outlook for the July Q of only $16B (vs. our $17.1B), 2) upside for the July Q revenues driven moreso by Infrastructure Software (guided $8.9B vs cons $7.7B), 3) disappointing GM guide of 74% (cons 76.8%), and 4) mgmt only reiterating its vision for AI revenues to exceed $100B in FY27 – thus, no increase from 3 months ago and consensus likely unchanged at $20.36 EPS for CY27 (though mgmt was clear that reiteration does not mean that the # did not change for the better – they are being conservative).

As for underlying pockets of good news, we highlight 1) AI bookings in excess of $30B in the current Q (BTB 2.8), 2) AI visibility today now extends very clearly through all of FY28 vs. just FY27 three months ago (with Hock highlighting substantial demand led by Google, OAI, Anthropic, and META), 3) $80B funding by Google and recent announced Apollo/Blackstone SPV supports strong underlying financial support for Compute adds, and 4) added color across key customers including substantial/strategic commitments from Google (supported by LTA), 6GW agreement with Anthropic, 1.3GW with OAI, 3GW through CY28 with META, and $6B PO’s from additional 2 customers (we believe Bytedance and Fujitsu).

Finally, directly to the Mediatek question, Broadcom does not view Mediatek as a direct competitor with the company’s IP supporting the company’s recently signed LTA (and Google using other suppliers for lowervalue offerings).

Putting it all together and no change to our bullish stance – we are in a rising compute tide, where many Accelerator providers can win (particularly those like AVGO and NVDA with world-class IP leadership).

We model $21.00 in EPS for CY27 but reiterate our vision for likely EPS of $23-25 when all is said and done with even stronger earnings into the CY28 timeframe ($30+?).

We reiterate our Overweight rating and $525 price target. Broadcom remains a TOP PICK, and we would be adding to positions on incremental weakness.”

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