Morgan Stanley Reaffirms Buy Rating on Broadcom Stock, Says ‘AVGO Remains a Core AI Winner’

Broadcom (AVGO) stock has risen only 13% year-to-date, underperforming several chip stocks amid concerns about rising competition from Taiwan-based semiconductor company MediaTek. However, Morgan Stanley analyst Joseph Moore remains bullish on AVGO stock and reiterated a Buy rating with a price target of $502, saying “AVGO remains a core AI winner.” He views Broadcom as a “close #2” to chip giant Nvidia (NVDA), driven by its dominance in the ASIC market, networking business, and new customer wins.

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Morgan Stanley Is Confident About Broadcom Stock

Moore said he is “surprised” by Broadcom stock’s year-to-date underperformance relative to peers, despite the company’s AI growth momentum. The 5-star analyst noted that while Broadcom’s weakness stems from several factors, including investors favoring faster-growth AI chip stocks, the most important reason remains the debate over MediaTek vs. AVGO’s share in Google’s (GOOGL) TPU (tensor processing unit) business.

Importantly, Moore acknowledges that MediaTek’s role in Google’s TPU business is real, given a “credible” 3 nm TPU opportunity, the need for Google to reduce dependence on Broadcom, and advanced packaging constraints. However, it is not significant enough to threaten Broadcom’s position. The analyst expects Broadcom to remain the major TPU supplier over time, with about an 80% share.

He thinks that the fears about AVGO’s share dropping to 50% or its complete displacement are “premature.” Moore contends that a rapid loss of Broadcom’s share seems unlikely, given its HBM (high-bandwidth memory) supply advantage, packaging capabilities, and extensive scale.

Moreover, Moore noted that Broadcom has multiple new ASIC customers ramping in the second half of 2027, which should drive further growth.

Is Broadcom Stock a Strong Buy?

Given solid demand for custom AI chips, Wall Street has a Strong Buy consensus rating on Broadcom stock, with 23 Buys and three Holds. The average AVGO stock price target of $513.29 indicates 32% upside potential.