TLDR
- UBS analyst Timothy Arcuri raised his AVGO price target from $475 to $490, implying ~17% upside from current levels.
- Broadcom reports fiscal Q2 earnings on June 3.
- Arcuri cut Anthropic-related revenue estimates after Broadcom shifted chip orders from full-rack to standardized ASIC setups.
- Despite lower forecasts, UBS expects Broadcom to beat Wall Street’s ~$22 billion revenue guidance estimate.
- AVGO holds a Strong Buy consensus on Wall Street, with 26 Buys and four Holds over the past three months.
UBS has lifted its price target on Broadcom (AVGO) to $490, up from $475, ahead of the company’s fiscal second-quarter earnings on June 3. The call comes from five-star analyst Timothy Arcuri, who sees roughly 17% upside from current levels despite trimming some revenue estimates.
AVGO stock is up 23% year to date, trading around $410, after a rough start to 2026 that saw it fall about 15% through March.
The stock has been on a tear since April, but Arcuri’s latest note reflects a more nuanced picture under the hood.
The change involves how Broadcom is fulfilling chip orders for Anthropic. The company shifted from full-rack AI systems to a more standardized ASIC configuration. That sounds like a step back, but the new setup actually carries higher profit margins.
Still, the shift slows the early ramp-up. Arcuri cut his Anthropic-related revenue estimate for 2026 to around $8 billion, down sharply from a prior forecast of $21 billion. His 2027 estimate was trimmed to $22 billion from $23 billion.
He also lowered his overall fiscal 2027 AI revenue forecast for AVGO to $133 billion from $145 billion, and nudged his 2027 earnings-per-share estimate down slightly to $21.14.
Why UBS Is Still Bullish
Even with those cuts, Arcuri isn’t hitting the exit. He still expects Broadcom to report Q2 revenue guidance above Wall Street’s consensus of roughly $22 billion.
He projects AI revenue will hit $13.6 billion in Q3 alone — a number that would keep Broadcom on track for a massive full-year figure.
CEO Hock Tan has pointed to $100 billion in AI revenue as a potential target for 2027. That would represent a fivefold increase from the $20 billion Broadcom earned from AI last year.
Arcuri’s higher price target also reflects sector-wide valuation expansion. The recent semiconductor rally has pushed multiples up across the board, giving him room to raise the target even while trimming some underlying estimates.
The XPU Story Is Still Early
Broadcom’s XPU chips — custom silicon designed for AI inference workloads — are still ramping up. The company has deals with Alphabet, Anthropic, OpenAI, and Meta Platforms, each customized to the client’s specific needs.
Inference workloads, where AI models are applied to real-world tasks rather than trained, are expected to grow as AI adoption matures. That’s a tailwind that hasn’t fully shown up in the numbers yet.
Broadcom’s total revenue in 2025 was $63.9 billion. If the $100 billion AI revenue target materializes, it would more than double the size of the company.
Wall Street consensus has Broadcom’s earnings growing at 41% annually over the next three to five years.
AVGO’s price-to-earnings ratio has moved from under 60 to over 80 during the recent rally, putting the PEG ratio at around 2 — not a bargain, but analysts argue the growth rate justifies it.
Broadcom’s Strong Buy consensus is based on 26 Buy ratings and four Holds over the past three months. The average analyst price target sits at $477.81.
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