<\/p>\n
Broadcom (AVGO) has been one of the most rewarding AI stocks in recent months, but its latest earnings report left investors wanting more.<\/p>\n
The semiconductor and software giant dished out another superb quarterly showing in Q2, extending its impressive streak of posting beats across both lines.<\/p>\n
Sales jumped sharply year-over-year, while profits continued to grow on the back of surging demand for AI infrastructure.\u00a0<\/p>\n
Despite the strong quarterly results, investors were left disappointed, particularly those expecting the kind of upside many analysts had forecast.<\/p>\n
Additionally, its long-term AI outlook essentially reiterated previous forecasts, instead of introducing a new catalyst.\u00a0<\/p>\n
Nevertheless, according to TheFly, five-star Jefferies analyst Blayne Curtis argues that Broadcom’s growth story remains intact, raising his price target and urging investors to remain patient despite near-term challenges.\u00a0<\/p>\n
A leading Wall Street analyst grew more optimistic on Broadcom despite mixed earnings results<\/p>\n
NurPhoto / Getty Images<\/p>\n
Wall Street price targets for Broadcom stockBNP Paribas raised Broadcom\u2019s price target to $640 from $600.\u00a0JPMorgan raised Broadcom\u2019s price target to $580 from $500.KeyBanc raised Broadcom\u2019s price target to $575 from $500.\u00a0Bernstein raised Broadcom\u2019s price target to $550 from $525.\u00a0Mizuho raised Broadcom\u2019s price target to $530 from $480.\u00a0Goldman Sachs raised Broadcom\u2019s price target to $525 from $500.
\nSource: MarketScreener.
\nBroadcom\u2019s AI chip role<\/p>\n
Broadcom\u2019s AI chip business is centered around custom work for hyperscalers.<\/p>\n
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Think of it as being a master tailor in the AI chip space, helping tech giants custom silicon that meets their workloads.<\/p>\n
Its role has become critical because the biggest names in the AI space, including Google, Meta, OpenAI, and Anthropic are looking for quicker and cost-efficient chips for their own systems.\u00a0<\/p>\n
On the flipside, Broadcom\u2019s competitive edge is its experience in custom ASICs, networking, packaging, designed to efficiently move data quickly inside AI data centers.\u00a0<\/p>\n
Jefferies sees AI growth outweighing near-term pressure<\/p>\n
Analyst Blayne Curtis stuck with a Buy rating on Broadcom stock, bumping his outlook following earnings, laying out the case that its AI opportunity remains the strongest in the chip space.\u00a0<\/p>\n
He raised his price target on Broadcom stock to $550 from $500, implying meaningful upside from its current share price of around $479.\u00a0<\/p>\n
That comes as a surprise, especially as the company\u2019s near-term guidance failed to impress, falling comfortably short of investor expectations.\u00a0<\/p>\n
For color, Curtis is one of Wall Street’s top-ranked chip stock analysts. According to TipRanks, the five-star analyst has a 70% success rate on his ratings, generating an average return of 41% per recommendation.<\/p>\n
Broadcom\u2019s July-quarter guidance came in strong in terms of sales though, with its management calling for $29.4 billion, while its AI chip revenue forecast of $16 billion came in behind the higher bar some analysts were expecting.\u00a0<\/p>\n
However, looking ahead, its management reiterated its fiscal 2027 AI sales opportunity at more than $100 billion, instead of raising their forecast which investors were hoping for.<\/p>\n
On top of that, Jefferies pointed to a potential profitability headwind.\u00a0<\/p>\n
Gross margin guidance came in below market expectations as Broadcom shifts its focus towards custom AI chips.<\/p>\n
Though these chips continue driving superb growth, they come with lower margins compared to the company\u2019s other offerings.\u00a0<\/p>\n
A big part of that is linked to hyperscalers co-designing ASICs at massive scale, offering customers even more pricing power.<\/p>\n
Nevertheless, Blayne notes that operating margins may improve as AI revenue becomes a bigger part of Broadcom\u2019s overall business.<\/p>\n
That view is linked to the higher-than-expected spending ramps from major customers, including the likes of Meta Platforms and OpenAI, forecast to increase demand for Broadcom’s custom AI solutions next year.<\/p>\n
Zooming out, the broader financial picture remains constructive.\u00a0<\/p>\n
Broadcom generated $68.3 billion in sales over the past 12 months (25% growth), while maintaining a gross profit margin of 77%. For perspective, its 5-year average gross margin is at 75% according to Seeking Alpha.<\/p>\n
Broadcom earnings history shows steady beats<\/p>\n
Broadcom has posted four consecutive quarters of EPS and revenue beats, with sales growth rising sharply year over year.<\/p>\n
Q2 2026: EPS of $2.44 beat by $0.04; revenue of $22.19 billion beat by $115.08 million, with YoY growth of 47.87%.Q1 2026: EPS of $2.05 beat by $0.03; revenue of $19.31 billion beat by $171.52 million, with YoY growth of 29.47%.Q4 2025: EPS of $1.95 beat by $0.08; revenue of $18.02 billion beat by $55.89 million, with YoY growth of 28.18%.Q3 2025: EPS of $1.69 beat by $0.03; revenue of $15.95 billion beat by $129.31 million, with YoY growth of 22.03%.
\nSource: Seeking Alpha.
\nBroadcom stock returns vs. the S&P 500Over the past week, Broadcom stock returned 13.60%, compared with 0.45% for the S&P 500.Over the past month, Broadcom stock returned 13.76%, compared with 4.48% for the S&P 500.Over the past six months, Broadcom stock returned 25.91%, compared with 10.28% for the S&P 500.Year to date, Broadcom stock returned 38.47%, compared with 10.35% for the S&P 500.Over the past year, Broadcom stock returned 86.58%, compared with 26.52% for the S&P 500.Over the past three years, Broadcom stock returned 490.18%, compared with 76.39% for the S&P 500.
\nSource: Seeking Alpha.<\/p>\n
Related: 5-star analyst resets Oracle stock price target<\/p>\n
#5star #analyst #revamps #Broadcom #stock #price #target #earnings<\/p>\n","protected":false},"excerpt":{"rendered":"
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