‘The Best Chip Name in 2026’: Citi Raises Broadcom (AVGO) Stock’s Price Target

Broadcom (NASDAQ:AVGO) will deliver its fiscal second-quarter earnings (April quarter) on June 3rd with strong AI-driven demand setting the scene for a solid readout.

That is the opinion of Citi’s Atif Malik, an analyst ranked in 3rd spot amongst the thousands of Wall Street stock experts, who expects that April and July quarter revenue and EPS will land modestly above consensus estimates, supported by ongoing AI demand momentum.  

Zooming out, the analyst sees AI revenue rising from roughly 49% of total sales today to about 81% by F4Q28. Malik also revised FY26, FY27, and FY28 EPS estimates (excluding SBC) by -4%, +5%, and +34%, respectively, mainly due to stronger TPU shipment assumptions. Additionally, the 5-star analyst now forecasts Google and Anthropic together will contribute around $80 billion in AI-related revenue, while total AI revenue should reach ~$115 billion in 2027, above his prior $100 billion estimate. Following that, AI sales should increase to $180 billion in 2028.

Malik’s updated FY26 and FY27 assumptions reflect a transition in the Anthropic partnership away from rack shipments and toward chip shipments. Chip revenue represents only around 20%–25% of the value of rack revenue, but it carries better gross margins.

The company now has six major AI customers, including Google, Meta, Anthropic, OpenAI, and two undisclosed customers that the analyst believes include ByteDance. Malik thinks the company is working with three additional customers on custom AI chips. While AVGO could theoretically partner with companies that do not develop their own LLMs for XPU deployments, those opportunities are less likely to scale to the level of its existing engagements.

Malik also believes competitive risks remain manageable. The analyst notes that Google has evaluated COT (customer owned tooling) for a while now, and that the companies’ 5-year LTA should help “alleviate these COT concerns.” While Google is expected to continue funding COT initiatives to preserve “supply chain visibility, pricing leverage, and optionality,” Malik believes it will be hard for the competition to catch up on the technological front.

The analyst also argues that concerns surrounding AVGO’s software business are overblown. Although enterprise security currently represents only a low-single-digit share of revenue, Malik believes its importance is increasing in the agentic AI era as enterprises focus more heavily on protecting their infrastructure. AVGO’s software products are deeply embedded within large organizations, particularly enterprises with more than 10,000 employees where workers often operate multiple devices, and sees little indication of meaningful customer migration toward competing platforms.

Bottom line, Malik considers AVGO the “#1 semis pick in 2026,” with the analyst maintaining a Buy rating on the stock and raising his price target from $475 to $500. The new figure suggests shares will gain 19% in the months ahead. (To watch Malik’s track record, click here)

It’s mostly Buys amongst Malik’s colleagues too. With an additional 25 Buys and 4 Holds, the stock claims a Strong Buy consensus view. Going by the $468.79 average price target, a year from now, shares will be changing hands for a 12% premium. (See AVGO stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.