Bank of America Securities analyst Vivek Arya reiterated a Buy rating on Broadcom yesterday and set a price target of $400.00.
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Vivek Arya has given his Buy rating due to a combination of factors that highlight Broadcom’s strong position in the accelerating AI market. Broadcom’s custom AI chip, known as XPU, is gaining traction with major customers such as Google, Meta, ByteDance, and potentially OpenAI, which is expected to significantly boost the company’s AI growth. The anticipated addition of $10 billion to Broadcom’s revenue in the second half of fiscal year 2026 is expected to drive AI growth to approximately 110% year-over-year, compared to the previous estimate of 55-60%.
Furthermore, Broadcom is expected to achieve substantial earnings leverage due to modest operating expense growth and a strategic focus on debt reduction. The company’s EPS projections for fiscal years 2026 and 2027 have been raised by 21% and 35%, respectively. Arya also notes that Broadcom’s market share in the AI sector could potentially double by 2027, reflecting the company’s competitive advantage in custom chips and networking. Despite potential risks such as customer concentration and increased competition, Arya’s analysis suggests that Broadcom is well-positioned to capitalize on the expanding AI market, justifying the raised price objective of $400.
Arya covers the Technology sector, focusing on stocks such as Advanced Micro Devices, Nvidia, and ON Semiconductor. According to TipRanks, Arya has an average return of 17.3% and a 60.83% success rate on recommended stocks.
In another report released today, Barclays also maintained a Buy rating on the stock with a $400.00 price target.