UBS analyst Timothy Arcuri has raised Broadcom’s (AVGO) price target to $345, up from $290, while maintaining a Buy rating. The Top analyst is optimistic about the semiconductor and software giant’s AI momentum heading into its fiscal third-quarter earnings.
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AVGO is scheduled to report its fiscal Q3 results on September 4. Currently, Wall Street analysts expect Broadcom to report earnings of $1.66 in Q3, compared to $1.24 in the same quarter last year. Also, the company’s revenue for Q3 is expected to rise 21% year-over-year to $15.82 billion.
Analyst Sees Strong Revenue Growth
In a note to clients, Arcuri stated that he expects in-line results but anticipates AVGO to raise guidance for the fiscal fourth quarter. The analyst attributed this positive outlook to strong demand for Google’s (GOOGL) newest AI chip, the TPUv6p. These chips rely on Broadcom’s custom silicon, and Arcuri believes unit shipments are ramping up.
The analyst also projects that the TPUv6p will experience a sharp ramp-up in the second half of 2025 and continue into 2026. Further, he sees wafer requirements for these chips to increase by 51% year-over-year. This momentum could lead to a 60% year-over-year increase in AVGO’s AI revenue for 2025.
In addition to the AI-related growth, Arcuri believes Broadcom will reaffirm its serviceable addressable market for custom chips, which is expected to be between $60 billion and $90 billion. He also anticipates that AI-related networking will strengthen in Fiscal 2026 as the deployment of Ethernet architecture increases.
Is AVGO a Good Stock to Buy?
On TipRanks, AVGO stock has a Strong Buy consensus rating based on 29 Buys and two Holds assigned in the last three months. The average Broadcom stock price target of $311.85 suggests an upside potential of 4.96% from its current price. Year-to-date, shares of the company have gained 28.86%.
