TLDR
- Cantor Fitzgerald analyst C.J. Muse raised his Broadcom price target to $600 from $525, implying about 68% upside from the stock’s recent price of $357.90
- Broadcom reported Q3 revenue of $29.59 billion, up 85.5% year over year, with AI semiconductor revenue surging 221% to $16.7 billion
- The company raised its fiscal 2027 AI revenue target to $115 billion and set a first-ever fiscal 2028 AI revenue guide of $230 billion
- Despite beating earnings estimates, the stock fell after Q4 guidance of $34.8 billion came in slightly below Wall Street’s $35 billion expectation
- Broadcom declared a quarterly dividend of $0.65 per share, payable September 30 to shareholders of record on September 21
Broadcom (AVGO) stock sits at $357.90, down from recent highs, but Cantor Fitzgerald sees a very different number ahead. Analyst C.J. Muse raised his price target to $600, pointing to 68% upside from current levels, citing the company’s rapidly expanding AI revenue outlook.
The target raise came on September 3, one day after Broadcom reported its fiscal third quarter results. The company posted revenue of $29.59 billion, topping analyst estimates of $29.36 billion. Earnings per share came in at $3.32, beating the $3.22 consensus by $0.10.
Year-over-year revenue growth hit 85.5%. That is not the number people are talking about though.
AI semiconductor revenue hit $16.7 billion, a 221% jump from the same period a year ago. That is the figure that shifted how analysts are thinking about this company’s trajectory.
On the earnings call, Broadcom raised its fiscal 2027 AI revenue target from over $100 billion to $115 billion. It then went further, issuing a first-ever fiscal 2028 AI revenue guide of $230 billion. That would put total 2028 revenue near $285 billion, roughly $50 billion ahead of what Wall Street had modeled.
Muse now models 2028 earnings per share of $35, well above the current consensus of $27.39. His $600 price target reflects about 17 times that estimate.
What Drove the Post-Earnings Selloff
Despite the strong numbers, AVGO fell after earnings. Two things pushed it lower.
The Q4 revenue guide of $34.8 billion came in just shy of the $35.03 billion Wall Street expected. That small miss was enough to trigger a sell-the-news reaction. Broader chip sector weakness added to the pressure, with traders locking in profits after a strong run.
Muse’s view is that the market is being too cautious given the size and visibility of Broadcom’s order backlog.
Supply Constraints Remain a Real Risk
Cantor flagged that Broadcom faces tight supply conditions through fiscal 2027. The bottlenecks run across advanced wafers and substrates, high-bandwidth memory, and CoWoS packaging.
Put simply, Broadcom’s challenge is not finding customers. It is making enough chips to fill the orders it already has.
Institutional interest remains strong. Stonehage Fleming raised its Broadcom position by 14.8% in Q2, adding 78,556 shares for a total stake worth about $230.7 million. Institutional investors collectively own 76.43% of the stock.
Broadcom carries about $65 billion in debt following its VMware acquisition, against roughly $20 billion in cash. Its cash flow covers this comfortably, but it is a number worth watching.
The company also declared a quarterly dividend of $0.65 per share, payable September 30 to shareholders of record on September 21. The annualized dividend comes to $2.60 per share, a yield of about 0.7%.
Thirty-one analysts currently rate AVGO a Buy, with four on Hold. The average price target sits at $500.60. Macquarie recently upgraded the stock to Outperform, while UBS moved it from Buy to Hold.
The 52-week range for AVGO is $289.96 to $495.00.
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