Key Takeaways
- AVGO declined 14% during June but recovered approximately 3% in Wednesday’s premarket session following positive analyst commentary
- J.P. Morgan maintained its Overweight stance with a $580 price objective, suggesting 54% potential gains
- Wolfe Research anticipates Broadcom’s XPU business generating $250–$300 billion by the end of fiscal 2028
- J.P. Morgan clarified that the Google TPU collaboration continues without disruption, countering recent supply chain diversification worries
- Among 55 Wall Street analysts surveyed by FactSet, 51 recommend buying AVGO with a mean price objective of $523.67
The semiconductor giant has experienced challenging trading conditions throughout June. Following a record finish at $481.57 per share on June 2, Broadcom witnessed a 14% decline by mid-month, settling at $376.71 during Tuesday’s close. However, optimism returned Wednesday morning as AVGO climbed roughly 3.2% in premarket activity to reach $388.85.
The upward momentum followed a research note from J.P. Morgan analysts Harlan Sur and Mayur Ramdhani, who indicated they would be “aggressive buyers at current levels.”
The financial institution reaffirmed its Overweight designation while maintaining its $580 price objective — representing 54% appreciation potential from Tuesday’s closing price.
Sur emphasized Broadcom’s leadership in sophisticated chip packaging architecture, its robust intellectual property assets, and its proven execution with key enterprise clients. He highlighted the company’s collaboration with Google, facilitating 14 cutting-edge chip architectures over the previous 12 years.
The Google arrangement has generated investor uncertainty recently. During previous communications, CEO Hock Tan indicated that Google would probably expand its chip supplier base, triggering market apprehension.
J.P. Morgan addressed these concerns directly, clarifying that no postponement or termination has occurred regarding the upcoming Google TPU initiative and that Broadcom continues progressing toward manufacturing.
The Alphabet collaboration spans ten years, encompassing eight successive iterations of Google’s Tensor Processing Units.
Street Projections for XPU Business
Wolfe Research contributed additional positive sentiment Wednesday. Following recent executive consultations, the firm indicated Broadcom’s XPU revenue trajectory could reach $250–$300 billion in fiscal 2028. Complete financing from hyperscale cloud providers might enable Anthropic and OpenAI XPU capacity to expand threefold to 15 gigawatts.
This substantial forecast has restored some market enthusiasm following a difficult period for semiconductor equities.
Tuesday’s downturn extended beyond Broadcom alone. Nvidia, Micron, AMD, Intel, and Marvell all experienced synchronized declines during a widespread semiconductor sector retreat. AVGO alone dropped 4.4% during that trading day.
The broader economic environment has presented additional challenges. The FOMC convened its initial session under new Chair Kevin Warsh, with markets anticipating a hawkish posture given persistent inflation pressures. The Nasdaq declined 1.2% while the S&P 500 fell 0.6%, making Broadcom’s premarket bounce particularly notable.
Analyst Community Maintains Constructive View
Oppenheimer’s Rick Schafer, who assigns the stock an Overweight rating with a $535 target, characterized the sentiment as “bullish” following recent discussions with Broadcom leadership.
Schafer noted that 2026 revenue visibility is secured with a “clear line of sight to deployments this year,” and that management anticipates AI-related revenue in the second half doubling compared to the first half.
“We remain long-term buyers,” he stated, while acknowledging that additional upside may materialize in 2028.
Broadcom aims to achieve $100 billion in AI semiconductor revenue during 2027. The company currently develops customized processors for six major clients, including Alphabet and OpenAI. While Nvidia maintains dominance in AI computing infrastructure, Broadcom’s application-specific integrated circuit division has expanded consistently throughout the AI datacenter construction cycle.
Notwithstanding June’s retreat, AVGO has advanced 11% year-to-date and climbed 53% over the trailing twelve months. Its 52-week trading range extends from $244.17 to $495.00, with Wednesday’s premarket valuation of $383.21 positioned considerably below the upper boundary.
Among 55 analysts monitored by FactSet, 51 assign the stock a Buy recommendation, establishing a consensus price objective of $523.67.
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