Chipmaker Broadcom (AVGO) stock is gaining attention ahead of its fiscal second-quarter earnings report, as Wall Street remains bullish on the company’s growing AI opportunity. On Tuesday, five-star-rated UBS analyst Timothy Arcuri raised his price target on AVGO stock from $475 to $490, suggesting nearly 17% upside from current levels. Broadcom is scheduled to report fiscal Q2 earnings on June 3.
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For context, Broadcom designs and supplies semiconductor chips and infrastructure software used across data centers, networking, broadband, and wireless systems.
UBS Stays Bullish on AVGO Stock
Arcuri said Broadcom has changed some AI chip orders for Anthropic from full-rack systems to a more standardized ASIC setup. While this reduces near-term revenue, the newer setup carries higher profit margins.
Because of this change, he lowered his estimates for Anthropic-related revenue at Broadcom. The analyst now expects around $8 billion in 2026 and $22 billion in 2027, down from previous forecasts of $21 billion and $23 billion. Most of the cut reflects a slower early ramp-up phase of the deal. Arcuri also reduced his fiscal 2027 AI revenue forecast for AVGO to $133 billion from $145 billion and slightly lowered his 2027 earnings estimate to $21.14 per share.
Despite the lower forecasts, UBS still expects Broadcom to deliver revenue guidance above Wall Street estimates of roughly $22 billion. Arcuri also remains bullish on AVGO stock, saying strong AI demand could help the company continue beating market expectations in the coming quarters. He expects AI revenue to reach $13.6 billion in the fiscal third quarter.
Overall, the analyst said the recent rally in semiconductor stocks has pushed valuations higher across the sector, which helped support his higher price target for AVGO despite lowering some revenue forecasts.
Is AVGO a Good Stock to Buy?
On Wall Street, Broadcom stock holds a Strong Buy consensus rating, based on 26 Buys and four Holds assigned in the last three months. The average AVGO stock price target of $477.81 indicates 16.24% upside potential from current levels.
