TLDR
- Broadcom reports Q3 FY26 earnings on September 2 after market close.
- J.P. Morgan reiterates a Buy rating with a $580 price target on AVGO.
- Wall Street expects EPS of $3.22, up 90.5% year-over-year, and revenue of $29.24 billion, up 83.3%.
- BakerAvenue’s King Lip names AVGO a “top pick,” seeing it as the key play for custom AI chips and inference demand.
- Wall Street consensus is Strong Buy, with an average price target of $511.88, implying 38% upside.
Broadcom is set to report its fiscal third-quarter results on Wednesday, September 2, after the closing bell. Heading into the print, AVGO stock is trading more than 25% below its year-to-date high.
Wall Street expects the chipmaker to post EPS of $3.22, a 90.5% jump year-over-year. Revenue is forecast to come in at $29.24 billion, up 83.3% from the same period last year.
J.P. Morgan analyst Harlan Sur reiterated his Buy rating on AVGO ahead of the report, keeping his price target at $580. Sur ranks No. 17 out of more than 12,500 analysts tracked on TipRanks, with a 70% success rate and an average return of 42.2% per rating.
Sur expects the quarter to be driven by the initial ramp of next-generation TPU v8i chips and continued strength in TPU v7. He also sees a boost from Meta Platforms‘ MTIA Iris ASIC ramp and strong demand for Broadcom’s Tomahawk 5 switching product.
Sur is also calling for FY26 AI revenue to top $56 billion, backed by a strong second-half ramp in TPU v8i and solid networking demand, including the new Tomahawk 6 102T switching platform.
Google Partnership Concerns Overstated, Analyst Says
AVGO stock has risen only 7% year-to-date, lagging the PHLX Semiconductor Index, which is up 61% over the same period. Sur attributes this underperformance to investor concerns about potential share loss at Google and limited visibility into FY27 AI revenue.
Sur says those concerns are overblown. He points to channel checks over the last 90 days suggesting Broadcom’s competitive position at Google remains intact. The recent deal between Google and Marvell Technology, he says, reflects Google adding partners to support its internal chip team rather than replacing Broadcom. A five-year agreement signed in early April keeps Broadcom as Google’s primary TPU partner.
Key questions heading into Wednesday’s call include whether management updates its FY27 AI revenue outlook, currently guided at over $100 billion, and what the company signals about momentum into FY28.
Analysts See AVGO as a Top Inference Play
BakerAvenue chief strategist King Lip also named AVGO a top pick ahead of earnings, citing a structural shift in AI infrastructure spending. He sees the market moving from training-focused workloads toward inference, where custom chips handle large-scale, repetitive tasks.
“Nvidia has been great for training models, but for huge repetitive type workloads, AVGO is our top pick for the next evolution in custom AI chips and inference play,” Lip told CNBC.
Lip stressed that Nvidia does not need to lose for Broadcom to win. The two serve different parts of the AI hardware stack.
Broadcom also pays a dividend yield of 0.71%, which adds to its appeal as a longer-term holding.
The overall Wall Street consensus on AVGO sits at Strong Buy, with 25 Buy ratings and 3 Holds. The average price target of $511.88 points to roughly 38% upside from current levels.
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