JPMorgan resets Broadcom stock price target

When a Wall Street heavyweight tells you a $1.8 trillion company still looks cheap, it’s worth slowing down to understand why.

That’s roughly the message coming out of JPMorgan (JPM) this month. Fresh off Broadcom’s latest earnings, the bank didn’t just nudge its outlook higher. It made a statement.

And for everyday investors trying to figure out whether the AI trade has more room to run, this price reset matters. 

Broadcom (AVGO) has quietly become one of the most important names in the artificial intelligence (AI) buildout, and its numbers are hard to ignore.

Why Broadcom became a quiet AI powerhouse

Broadcom designs custom AI chips, called XPUs, for a handful of the world’s largest tech companies. 

Think of it as a master tailor of silicon, building made-to-measure processors that Google, Meta, and others can’t easily buy off the shelf.

It also makes the networking gear that ties thousands of these chips together inside data centers. 

That second piece is just as critical, since a giant AI cluster is only as fast as the connections linking its chips.

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This combination has turned Broadcom into a core supplier for the companies spending the most on AI. And spending, right now, is enormous.

The company has six big customers, which it calls its core base.

• In the most recent quarter, total revenue hit a record $22.2 billion, up 48% from a year earlier.
• AI semiconductor revenue reached a record $10.8 billion, up 143%.

“Broadcom achieved record revenue, operating profit and free cash flow in Q2 driven by accelerating growth in AI semiconductor revenue and strong operating leverage,” Broadcom CEO Hock Tan said.

“Q2 semiconductor revenue from AI of $10.8 billion grew 143% year-over-year, above our forecast, driven by increasing demand for custom AI accelerators and AI networking.”

Despite its stellar numbers, Broadcom stock fell almost 20% following its fiscal second-quarter results (ended in April). 

JPMorgan resets its Broadcom stock price target higher

Now for the news.

JPMorgan raised its price target on Broadcom to $580 from $500, while keeping an overweight rating, according to Investing.com. With the stock recently trading near $396, this suggests roughly 46% upside.

The investment bank pointed to Broadcom’s second-quarter results and its July-quarter guidance, which calls for revenue of $29.4 billion (up 84% year over year) and AI chip revenue of $16 billion (up more than 200%). 

Related: Broadcom CEO drops unexpected message on AI and software

Recent revenue growth of 25% and a 77% gross margin highlight the strength of the business.

AI bookings topped $30 billion, while $10.8 billion was shipped, Investing.com explained, swelling the backlog and giving the company unusual visibility into future sales.

JPMorgan also walked through Broadcom’s growing roster of customers, Investing.com added. 

• A multi-generation chip deal with Google
• An Anthropic agreement adding about 5 gigawatts of next-generation capacity from fiscal 2027 on top of its existing 1-gigawatt-plus footprint
• OpenAI’s 1.3 gigawatts slated for fiscal 2027 
• Meta’s program totals 3 gigawatts through 2028

Two more customers begin ramping in late 2026, with $6 billion in orders already booked, Investing.com confirmed. 

On Broadcom’s 20-plus-gigawatt compute platform built with Apollo and Blackstone, JPMorgan figures that only about 5 gigawatts will ship in fiscal 2027, according to Investing.com.

The eye-popping part: The firm said fiscal 2028 AI revenue could approach $300 billion once Google, Meta, and other programs are folded in, well above current expectations.

What other Wall Street banks are saying about AVGO

Several firms moved their targets after the report, Investing.com noted.

• BofA Securitiesraised the AVGO stock price target to $530. It projects AI growth near 180% in fiscal 2026 and roughly 100% in fiscal 2027.
• Evercore ISI increased the target price to $582  with an outperform rating. It noted that April-quarter earnings beat by 2% and July guidance topped consensus by 3%.
• UBStrimmed the AVGO stock price target slightly to $485, but kept its buy rating, citing supply constraints on AI guidance.
• Raymond James lifted its target price to $450 and maintained an outperform rating.
• RBC Capitalraised its price target to $400 and maintained a “sector perform” rating, on strong bookings and visibility beyond fiscal 2027.

Out of the 28 analysts covering Broadcom stock, 24 recommend “buy” and four recommend “hold.”

The average AVGO stock price target is $510, indicating a potential upside of 29% from current levels. 

The takeaway is clear. Even the more cautious voices stayed positive, and Broadcom reaffirmed its fiscal 2027 target of more than $100 billion in AI revenue.

The one catch Broadcom investors should watch

As AI chips become a bigger slice of sales, Broadcom’s gross margin gets squeezed. Management guided third-quarter gross margin down to roughly 74%, since custom AI silicon carries thinner margins than its software business.

CFO Kirsten Spears, who retires on June 12 after 12 years, urged investors to model the semiconductor and software margins separately.

The compression, she stressed, reflects product mix and not a weaker chip business.

Tan’s bigger-picture argument is that strong operating leverage keeps profit dollars climbing even as margin percentages dip. So far, the results back him up.

For investors, the question is whether the AI buildout keeps its torrid pace. JPMorgan, clearly, is betting it will.

Related: HSBC massively revamps Broadcom’s stock price target