Goldman Sachs (GS) raised its price target on Broadcom (AVGO) to $435 from $380. The firm kept its Buy view and set a clear focus on the company’s coming results on December 11. The bank said investors will look for signs of steady growth in the company’s AI lines and will track how strong demand from Google (GOOGL) and OpenAI (PC:OPAIQ) may shape that outlook.
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Meanwhile, AVGO shares rose 1.87% on Tuesday, closing at $385.03.
Focus on AI Revenue and Key Client Strength
Goldman Sachs’ four-star analyst James Schneider said he expects steady AI strength in the fourth quarter. He also noted that he sees first-quarter guidance above Street views due to strong spend levels at major clients. Schneider wrote that he expects “updated FY26 AI revenue guidance above 100% year over year.”
In addition, he raised his AI revenue view for the Fiscal year 2026 to $45.4 billion. This marks an increase of around 128% from the year before. He also sees AI revenue reaching $77.3 billion in the Fiscal year 2027.
Furthermore, he said investors will watch the impact of Google and OpenAI in the next year. Broadcom helps Google build its in-house AI chips, and the launch of the recent Gemini 3 model has added fresh signs of scale in that line. Schneider wrote that “investors are positioned positively given strong peer results and positive datapoints related to key XPU customers, most notably Google following its latest Gemini 3 launch.”
Market Setup and Margin Path
At the same time, the bank said that the market has high hopes for the report. Shares of Broadcom have risen about 67% this year, and the stock is up this week as well. The analyst said the market tone is firm heading into the update and noted that the next guide may set the tone for the first half of the new year.
Even so, Schneider said many investors will also track Broadcom’s margin path. He said the rapid scale of the custom XPU line may trim margins in the near term. He added that “we expect focus on Broadcom’s margin progression in FY2026 as XPU revenue ramps up over 160% year over year.”
Is AVGO Stock a Buy?
On the Street, Broadcom enjoys analyst backing, with a Strong Buy consensus rating. The average AVGO stock price target stands at $399.52, suggesting a 3.76% upside from the current price.
