TLDR
- Deutsche Bank added Applied Materials and Broadcom to its top tech picks list for the next 12 months
- Applied Materials shares have rallied 38.3% this year, driven by memory chip demand and Taiwan Semiconductor’s increased spending
- Broadcom’s AI chip business grew 106% and is projected to generate over $100 billion in revenue by fiscal 2027
- Broadcom secured a five-year, ~$970 million software deal with the U.S. Department of Defense
- Analysts give Broadcom a consensus “Moderate Buy” rating with an average price target of $435.30
Deutsche Bank added Applied Materials and Broadcom to its list of top tech investment picks at the start of the second quarter of 2026. The list covers a 12-month outlook and also includes Oracle, Spotify, T-Mobile US, Digital Realty Trust, and Cellebrite DI.
Applied Materials was flagged by analyst Melissa Weathers as a strong candidate heading into the rest of the year. She pointed to growing demand for the company’s dynamic random-access memory chips as a key driver.
Weathers also noted that Taiwan Semiconductor Manufacturing has significantly increased its capital expenditure plans. The chipmaker is building new fabs in Arizona and Taiwan, and it buys chip equipment from Applied Materials.
She acknowledged risks tied to Applied Materials’ exposure to China, where domestic chip development is expanding. However, she believes the company’s deep market presence gives it an edge over local competitors.
Applied Materials shares have risen 38.3% so far in 2026. By comparison, the PHLX Semiconductor Index is up 10%, and the S&P 500 has slipped 4%.
Broadcom was the second addition to the Deutsche Bank list. Analyst Ross Seymore highlighted momentum in its AI-focused semiconductor business, covering both networking and compute segments.
Broadcom has confirmed six customers for its custom AI chips. The company is expected to generate over $100 billion in AI chip revenue in fiscal 2027, according to Seymore.
Broadcom also maintains revenue from non-AI sources, including its infrastructure software business. The company said it expects stable gross margins for its chip segment due to a high pricing strategy.
Broadcom’s AI Business in Focus
Broadcom reported 106% growth in AI semiconductor revenue in its most recent quarter. The company also landed a five-year software agreement with the U.S. Department of Defense worth approximately $970 million.
Revenue for the quarter came in at $19.31 billion, up 29.5% year over year. Earnings per share were $2.05, slightly above the consensus estimate of $2.03.
Despite that, Broadcom’s stock has fallen 9.9% in 2026 after a 49.3% gain in 2025. Gross margins have also slipped as the product mix shifts more toward AI chips.
Analyst Ratings and Insider Activity
Thirty analysts currently cover the stock. Twenty-nine have a Buy rating, one has a Strong Buy, and three have a Hold. The average price target stands at $435.30.
Morgan Stanley raised its price target to $470, while Citigroup set a target of $475. Both firms maintained bullish ratings in early March.
Insider selling has drawn some attention. Broadcom’s CFO and another insider sold a combined $27.9 million worth of shares on March 17th. Over the past quarter, insiders sold a total of 373,049 shares valued at around $123 million.
Institutional investors own 76.43% of Broadcom’s stock. The company paid a quarterly dividend of $0.65 per share on March 31st, with an annualized yield of 0.8%.
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