JPMorgan Reiterates Overweight on Broadcom, $580 PT

JPMorgan analyst Harlan Sur reiterated an Overweight rating and $580.00 price target on Broadcom Limited (NASDAQ: AVGO) telling investors to “ignore the noise – TPU v9 2nm ASIC program on track for CY28 ramp – no delays.”

“Contrary to the recent noise from sell-siders, Asia supply chain, and various news outlets that Broadcom/Google has delayed or canceled its next-gen Google TPU v9 2nm program, we believe, based on our own recent primary research work and past reports, that the team remains on track to ramp its next-gen TPUv9 2nm (4 compute die, 16 HBM stacks, 400Gbps SERDES) in CY28 – no delays/no cancelations.

The Broadcom team started the IP design for v9 in the 1H of last year and the SOC design of the TPUv9 2nm ASIC in the 2H of last year, and this remains one of the highest priority programs at Broadcom.

Just as important, on the current generation TPU v8i 3nm program (“Sunfish”), we believe the Broadcom team was fully qualified in mid-CY25 for this program and will start ramping this quarter; on the other hand, we believe Google’s COT team (working with Mediatek, covered by JPM analyst Gokul Hariharan) is still working to optimize the design of their current-gen “Zebrafish” TPU v8t 3nm (single compute die, 6 HBM stacks) program – implying that Broadcom has a 18mos+ lead over the COT team.

Although we believe it prudent for Google (covered by JPM analyst Doug Anmuth) to have a diversity of suppliers and form its own COT team, we have written previously that it will likely take Google’s COT team years (at a minimum) to close the advanced chip and packaging design/IP gap with Broadcom.

The five-year agreement between Google and Broadcom in March locks in Broadcom’s TPU design win roadmap for the next four generations of TPU (v8, v9, v10, v11) and we believe includes commitments for increasing TPU revenues on an annual basis through 2031… We reiterate our OW rating on AVGO and would be aggressive buyers at current levels.”