Broadcom (AVGO) reported blockbuster Q4 fiscal results yesterday. Shares initially rallied but fell 4.5% in after-hours trading as investors fretted over delayed OpenAI (PC:OPAIQ) revenue. Interestingly, CEO Hock Tan revealed that its secret $10 billion customer was Anthropic (PC:ANTPQ), and the company just signed an additional $11 billion deal with the AI startup.
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Adjusted earnings per share (EPS) of $1.95 surpassed analysts’ consensus estimate of $1.87. Sales also surged 28.2% year-over-year to $18.02 billion, topping expectations of $17.47 billion. Moreover, Broadcom secured a $1 billion order from an undisclosed fifth AI chip client. Tan also noted a $73 billion “minimum” AI order backlog, to ship over the next six quarters.
Analysts Raise AVGO Price Targets
Despite investor concerns, analysts praised Broadcom’s AI progress via custom ASIC chips.
Mizuho Securities analyst Vijay Rakesh maintained his Buy rating, while raising the price target from $435 to $450, implying 10.7% upside potential. Rakesh was impressed by AVGO’s better-than-expected Q1 FY26 guidance of $19.1 billion in sales. He forecasts full-year 2026 revenue of about $45 billion, driven by a $73 billion 18-month backlog. He also noted that Anthropic’s orders doubled to $21 billion, along with a new fifth customer contributing $1 billion. OpenAI is likely becoming the sixth customer in FY27–FY29 with a 10-gigawatt deal.
Similarly, TD Cowen analyst Joshua Buchalter kept his Buy rating and lifted the price target from $405 to $450. He noted that investors had high hopes for the earnings report, expecting boosts from AI businesses like Ethernet switching and TPUs. The actual results and guidance met those hopes, with Q1 AI revenue hitting $8.2 billion and beating Buchalter’s model by $1 billion. The $73 billion AI backlog (over 18 months) could have disappointed. He added that investors expected the OpenAI deal to start soon and add significantly, but it likely is not included in the backlog yet. Moreover, a new fifth customer ordered $1 billion for late FY26 delivery, but investors thought this was OpenAI, and $1 billion is too small for that.
Is AVGO Stock a Buy?
On TipRanks, AVGO stock has a Strong Buy consensus rating based on 24 Buys and one Hold rating. The average Broadcom price target of $436.33 implies 7.4% upside potential from current levels. Year-to-date, AVGO stock has surged more than 76%.
