TLDR
- Broadcom stock fell 2.8% pre-market September 2, despite Wall Street maintaining Strong Buy consensus rating
- Cantor Fitzgerald raised AVGO price target to $350 from $300, calling it a “Top Pick” for AI growth
- Goldman Sachs kept Buy rating with $340 target as Q3 earnings approach September 4
- Custom Silicon revenue projected to reach $25-30 billion in 2026, $40+ billion by 2027
- Strong demand expected from Google TPU v6/v7p and Meta MTIA chip orders
Broadcom stock dropped 2.8% in pre-market trading Tuesday despite receiving multiple analyst upgrades ahead of its Q3 2025 earnings report.
The semiconductor giant faces heightened investor expectations as it prepares to announce results after market close Thursday, September 4.
Analyst Upgrades Signal Confidence
Cantor Fitzgerald analyst C.J. Muse boosted his AVGO price target to $350 from $300 while maintaining an Overweight rating. Muse ranks among the top 130 analysts tracked by TipRanks with a 69% success rate and 27.7% average return.
The analyst expects Broadcom to deliver a modest beat and raise for Q3. He sees upside potential driven by the Semiconductor Solutions segment, particularly Custom Silicon chips designed for major tech companies.
Goldman Sachs analyst James Schneider separately reiterated a Buy rating with a $340 price target. Schneider highlighted Broadcom’s growth prospects and innovative product development as key drivers.
AI Chip Demand Fuels Revenue Projections
Muse projects strong demand from Google’s next-generation TPU v6 processors and upcoming TPU v7p chips, which will ramp production in the second half of 2025.
Meta’s in-house MTIA chips are expected to scale more meaningfully starting in the October quarter. These custom processors represent high-margin, long-term contract opportunities for Broadcom.
The analyst estimates Custom Silicon revenue could reach $25-30 billion in 2026. By 2027, revenue may exceed $40 billion, potentially driving earnings to $10 per share in 2026 and $13 per share in 2027.
Broadcom’s cyclical chip business shows recovery signs after nine consecutive quarters of decline. The July quarter marked a potential turning point for this segment.
Market Consensus Remains Bullish
Wall Street maintains a Strong Buy consensus on AVGO stock based on 27 Buy ratings and 2 Hold ratings. The average price target sits at $313.63, indicating 5.5% upside potential from current levels.
Forecast models project AVGO trading between $296 and $348 throughout 2025. Most analysts cluster their targets in the $310-$315 range, suggesting moderate near-term growth expectations.
The Infrastructure Software segment should provide stable earnings to balance semiconductor volatility, according to Muse.
Broadcom continues benefiting from artificial intelligence adoption across major technology companies, with Custom Silicon chips representing a key competitive advantage in the growing AI accelerator market.
