TD Cowen Reiterates Buy on Broadcom, $500 PT

TD Cowen analyst Joshua Buchalter reiterated a Buy rating and $500 price target on Broadcom Limited (NASDAQ: AVGO).

“We believe investors will focus on whether Broadcom sustains the extended nature of its multi-year visibility, and whether commentary remains specific enough to keep confidence high.

Management had reiterated its line of sight to “>$100B” in AI Semis revenue for F2027, which could see material upside if all ~10GW deploys.

We think expectations into the print are anchored by increasing multi-year AI visibility and gross margin after last quarter. o While we remain confident in the trajectory of TPU (bolstered by Google’s CapEx commentary), we are also still cautious on other XPU programs, noting an incremental softening of the Meta MTIA timeline last quarter, and uncertainty surrounding other projects like OpenAI’s ASIC. o We believe investors will focus on whether Broadcom sustains the extended nature of its multi-year visibility, and whether commentary remains specific enough to keep confidence high. • We expect firm commentary and fundamentals on Google’s TPU program, but Mediatek’s share will remain a narrative headwind.

Our checks continue to support upside to Broadcom’s estimates even with a non-trivial revenue ramp from Metiatek’s TPU program. o Given the technical and commercial challenges of ramping a new compute platform and its LTA with Google, we still believe Broadcom has earned the benefit of the doubt retaining high market share at Google.”

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