TLDR
- Broadcom stock surged nearly 10% to record $370 after CEO received massive AI-focused incentive package
- Hock Tan could earn up to $660 million if AI revenue hits $90-120 billion by 2028-2030
- J.P. Morgan maintains top pick status with $400 price target on AI technology leadership
- CEO sold $50 million in shares same day but overall 2025 sales pace remains lower than prior year
- Early recovery signals emerge in non-AI semiconductor segments heading into 2026
Broadcom stock reached an all-time high near $370 following news of CEO Hock Tan’s unprecedented AI revenue incentive package. The compensation plan could pay out up to $660 million if the company hits aggressive growth targets.
The chip giant’s stock jumped 9.8% on September 10 after regulatory filings revealed the incentive structure. Tan stands to receive over 600,000 shares if Broadcom generates $90 billion in AI revenue during any 12-month period from fiscal 2028 to 2030.
The reward triples if AI revenue exceeds $120 billion, creating a potential $660 million payday at current stock prices. This represents one of the largest CEO incentive packages tied to specific business metrics.
Broadcom expects $20.2 billion in AI revenue for fiscal 2025. Reaching the $90 billion target by 2028 would require maintaining a 65% compound annual growth rate. The company forecasts 66% AI revenue growth next quarter.
Wall Street Backs AI Strategy
J.P. Morgan’s five-star analyst Harlan Sur reinforced his bullish stance following discussions with CFO Kirsten Spears. Sur maintained his Overweight rating and $400 price target, implying 15% upside potential.
The analyst highlighted Broadcom’s technology leadership position in AI chips. The company plans to tape out first-generation 2nm/3.5D package AI XPU products this year for prospective customers.
Broadcom is expanding beyond silicon to deliver complete AI rack-scale deployments. Each customer engagement could potentially scale to one million XPU AI clusters, according to management guidance.
Sur noted that AI demand remains exceptionally strong across Broadcom’s customer base. The company continues positioning itself ahead of merchant GPU rivals through advanced packaging and custom silicon capabilities.
Mixed Signals on Executive Trading
Despite the bullish incentive package, Tan sold 148,154 shares worth $50 million on September 10. The discretionary sale occurred at $336.67 per share before the stock’s surge that day.
However, Tan’s 2025 trading activity appears less concerning in historical context. He has sold approximately 346,000 shares worth $101 million this year compared to over 702,000 shares worth $110 million from December 2023 through December 2024.
The reduced share count suggests Tan is decreasing his ownership percentage by a smaller amount than previously. This provides a more positive read on insider sentiment despite the dollar value of recent sales.
Broadcom shows early recovery signs in non-AI semiconductor segments. Bookings are increasing in broadband, server storage, and enterprise networking with potential acceleration entering fiscal 2026.
The VMware business continues steady expansion with platform conversion expected to complete by fiscal 2026 end. Wall Street maintains a Strong Buy consensus with 27 Buy ratings versus 2 Holds and an average $379 price target.
