Broadcom just got an upgrade before its earnings due next week. Oppenheimer analyst Rick Schafer reiterated his outperform rating and lifted his price target on Broadcom shares by $20 to $325 ahead of the chipmaker’s earnings report on Sept. 4. His new target suggests shares could gain about 8.2% from Monday’s close. Shares of Broadcom have gained about 29.5% this year driven by growth in AI-related revenue, strong customers for its hardware and ongoing market support for the tech sector. The analyst said Broadcom remains the “no. 2 AI franchise” after Nvidia , given its leadership in the AI ASIC, or Application-Specific Integrated Circuit, market. These custom-designed microchips are tailored towards AI tasks and are optimized for higher efficiency, speed and specialization. “We see upside to F3Q (July) results and F4Q (Oct.) outlook. Growth continues to be led by AI compute/networking franchises ( > 50% Semi segment). AVGO is the top maker of custom AI ASICs with seven announced projects led by GOOG, META, ByteDance USA. Mgmt. sees top hyperscalers utilizing custom AI ASICS to optimize frontier LLMs,” Schafer wrote in a note to clients. “We remain long-term buyers,” he continued, adding that the company’s core businesses in networking, wireless, broadband, server and storage, and software all support “sustainable growth and cash return.” The analyst pointed to Broadcom’s projects with several high-profile clients — which include Google, Meta, OpenAI, Apple — that remain a tailwind for the company’s growth. AVGO 1Y mountain Broadcom stock performance. To be sure, analysts polled by LSEG have a consensus price target on Broadcom that suggests about 0.5% downside, suggesting the stock could be overvalued. Of the 43 analysts covering the name, 12 rate it a strong buy while 29 have a buy rating on the name, per LSEG.
