TLDR
- Goldman Sachs raised Broadcom’s price target from $380 to $435, maintaining a buy rating ahead of Q4 earnings on December 12
- The stock has surged 66% year-to-date, approaching a $2 trillion valuation
- Broadcom’s custom AI chip business (XPUs) now accounts for 65% of AI-related sales, driven by partnerships with Google and OpenAI
- Q4 expectations include $17.0-$17.4 billion in revenue with AI chips projected to hit $6.2 billion, up 66% year-over-year
- Goldman expects fiscal 2026 AI revenue guidance to exceed 100% year-over-year growth
Broadcom stock keeps climbing, and Wall Street is taking notice. Goldman Sachs analyst James Schneider just lifted his price target on the chipmaker from $380 to $435. That’s a 14.5% bump and a 15% upside from Tuesday’s closing price.
The stock has already jumped 66% this year. It’s now flirting with a $2 trillion valuation. Schneider kept his buy rating intact, calling Broadcom the most important “arms dealer” in the AI boom.
But here’s the thing. With that kind of run, expectations are sky-high. Investors want more than just good numbers when Broadcom reports Q4 earnings on December 12. They want a beat, a raise, and a strong fiscal 2026 guide showing AI sales above $11 billion.
Broadcom’s custom chip business is where the action is. These specialized AI accelerators, called XPUs, now make up 65% of the company’s AI-related revenue. Google and OpenAI are the big customers here. Google’s latest Gemini 3 launch relies heavily on Broadcom-designed TPUs.
The company has a $110 billion backlog. A fourth major AI customer just placed over $10 billion in orders. That kind of pipeline doesn’t happen by accident.
AI Revenue Takes Center Stage
For Q4, Wall Street expects earnings of roughly $1.87 per share on revenue between $17.0 billion and $17.4 billion. Broadcom’s own guidance sits at the top of that range. The AI chip segment alone is projected to hit $6.2 billion, up 66% year-over-year. That’s more than a third of total sales.
Infrastructure software, led by VMware, should add another $6.7 billion. That’s a 15% increase. The pieces are in place for a solid quarter.
But Schneider’s note makes one thing clear. When a stock runs this hard, even great results can disappoint. The bar is high. Google’s strong performance with chips designed by Broadcom has pushed expectations even higher.
Goldman Sees More Than Hype
Broadcom now trades at over 28 times forward sales and 55 times forward cash flows. Those are lofty multiples. But Goldman sees Broadcom as more than just an AI hype play. The firm views it as one of the few companies actually building the hardware foundation that everyone else depends on.
Schneider pointed to three key areas investors care about. First, the AI revenue guidance for fiscal 2026. Second, how much Google and OpenAI are contributing to sales. Third, whether Broadcom can maintain its margins as XPU volumes scale up.
The analyst expects fiscal 2026 AI revenue guidance to show more than 100% year-over-year growth. That would be a big deal. It would prove Broadcom’s custom chip strategy is working at scale.
Goldman’s upgraded price target reflects confidence that Broadcom’s partnerships with Google and OpenAI will keep driving growth as demand for specialized AI accelerators and networking gear continues to surge through 2026.
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