TLDR
- Broadcom stock has fallen 15% over the past month and is currently trading around $372, down 25% from its recent high of nearly $500
- Broadcom and OpenAI unveiled a new chip called “Jalapeño,” an LLM inference processor described as having “substantially better” per-watt performance than current state-of-the-art chips
- Jefferies analyst Blayne Curtis rates AVGO a Buy, calling the pullback a “meaningful opportunity,” with an average Wall Street price target of $516.91
- Broadcom has a long-term agreement with Google running through 2031, with potential revenue exceeding $500 billion across future TPU generations
- Wall Street holds a Strong Buy consensus on AVGO, based on 24 Buys and 3 Holds
Broadcom’s stock has had a rough ride lately. After touching nearly $500, it has pulled back sharply to around $372 — a 25% drop from its recent peak. Over the past month alone, the stock is down 15%.
That kind of move tends to get analysts talking. And right now, the conversation is turning bullish.
Jefferies analyst Blayne Curtis came out this week with a Buy rating on AVGO, saying the recent sell-off has created a “meaningful opportunity” for investors. Curtis is a 5-star analyst, and he’s not alone in that view.
The timing of his note lines up with a product announcement that could matter for Broadcom’s next chapter.
Broadcom and OpenAI Unveil “Jalapeño”
Last week, Broadcom and OpenAI jointly revealed a new custom chip called Jalapeño. It’s OpenAI’s first Intelligence Processor, built from the ground up to handle large language model (LLM) inference workloads.
Inference — the process of running AI models to generate responses — has become increasingly important as companies like OpenAI move beyond just training models and into deploying them at massive scale.
Broadcom says Jalapeño’s per-watt performance is “substantially better than current state-of-the-art,” though the chip is still in testing. If that holds up, it could be a strong selling point for OpenAI and potentially other AI companies down the road.
For Broadcom, the chip matters strategically. It shows the company can design custom silicon for a major hyperscaler beyond its existing Google relationship.
Curtis noted that Jalapeño is “an important step for AVGO on the road to further customer diversification beyond Google.”
Google Deal Still a Cornerstone
Speaking of Google — Broadcom’s relationship there remains a major asset. The company holds a long-term agreement with Google that runs through 2031, covering future generations of Google’s TPU (Tensor Processing Unit).
That deal includes minimum revenue guarantees, with the potential to generate more than $500 billion through 2031.
Curtis expects Broadcom’s TPU 8i to enter production in Q3 2026. He also downplayed concerns about competition from MediaTek, noting that MediaTek’s competing TPU 8t is expected to ship only limited volumes this year.
On valuation, Curtis ran a scenario analysis putting Broadcom’s 2028 EPS somewhere between $30 and $40. At $377, that implies a P/E multiple of around 10x on 2028 earnings — which he considers low for a company of Broadcom’s quality.
Broadcom’s most recent quarterly revenue came in at $22.2 billion, up 48% year-over-year. Despite that, the stock didn’t get much of a lift. It currently trades at over 60 times earnings, which keeps expectations high.
The stock is still up around 9% year-to-date.
Wall Street’s overall view on AVGO sits at a Strong Buy consensus, with 24 Buy ratings and 3 Holds. The average price target across analysts is $516.91, implying roughly 37% upside from current levels.
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