Key Takeaways
- AVGO shares declined 14% during June but surged approximately 3% in Wednesday’s premarket session following optimistic commentary from J.P. Morgan
- J.P. Morgan maintained its Overweight stance with a $580 price objective, suggesting 54% potential appreciation
- Wolfe Research estimates Broadcom’s XPU business could generate $250–$300 billion by fiscal year 2028
- J.P. Morgan dismisses concerns regarding Google TPU collaboration, confirming the partnership continues as planned
- Among 55 Wall Street analysts surveyed by FactSet, 51 recommend buying AVGO with an average target of $523.67
Broadcom shares experienced significant turbulence throughout June. Following a peak closing price of $481.57 on June 2, the semiconductor giant witnessed a 14% retreat, settling at $376.71 by Tuesday’s close. However, Wednesday’s premarket session delivered encouraging signs, with AVGO climbing roughly 3.2% to $388.85.
The upward movement followed a research note from J.P. Morgan analysts Harlan Sur and Mayur Ramdhani, who characterized current price levels as attractive entry points and suggested being “aggressive buyers at current levels.”
The investment firm maintained its Overweight designation while reaffirming a $580 price objective — representing a substantial 54% premium over Tuesday’s closing figure.
Sur emphasized Broadcom’s competitive advantages in sophisticated chip packaging architecture, its extensive intellectual property holdings, and its proven execution with leading technology companies. He highlighted the company’s collaboration with Google on 14 cutting-edge chip projects spanning the last dozen years.
Investor sentiment around the Google partnership has recently wavered. CEO Hock Tan previously indicated that Google might broaden its semiconductor supplier base, triggering market uncertainty.
J.P. Morgan countered these apprehensions, clarifying that the upcoming Google TPU initiative faces neither postponement nor termination, and Broadcom maintains its production timeline.
The strategic alliance with Alphabet spans ten years, encompassing eight successive generations of Google’s Tensor Processing Unit architecture.
XPU Revenue Projections From Wall Street
Wolfe Research contributed additional optimism Wednesday. The research house indicated that recent executive discussions suggest Broadcom’s XPU revenue could reach $250–$300 billion in fiscal 2028. Complete financial backing from hyperscale cloud providers could enable Anthropic and OpenAI XPU deployments to expand threefold to 15 gigawatts.
This substantial forecast has helped restore investor sentiment following a challenging period for semiconductor equities.
Tuesday’s market decline extended beyond Broadcom. Nvidia, Micron, AMD, Intel, and Marvell all experienced simultaneous losses in what represented a comprehensive semiconductor sector downturn. AVGO alone retreated 4.4% during that trading session.
The broader economic environment has presented headwinds. The Federal Open Market Committee is conducting its inaugural meeting under new Chair Kevin Warsh, with investors anticipating a hawkish posture amid persistent inflation concerns. The Nasdaq declined 1.2% while the S&P 500 slipped 0.6%, making Broadcom’s premarket strength particularly noteworthy.
Wall Street Maintains Positive Long-Term View
Oppenheimer analyst Rick Schafer, who carries an Overweight rating with a $535 target, characterized the sentiment as “bullish” following recent discussions with Broadcom leadership.
Schafer indicated that fiscal 2026 revenue visibility is secure with a “clear line of sight to deployments this year,” and management anticipates AI-related revenue in the second half doubling compared to the first half.
“We remain long-term buyers,” he stated, while noting that additional upside may materialize in 2028.
Broadcom is pursuing $100 billion in artificial intelligence chip revenue for 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 custom silicon operation has expanded consistently throughout the AI data center expansion cycle.
Notwithstanding June’s pullback, AVGO has delivered 11% gains year-to-date and advanced 53% over the trailing twelve months. The stock’s 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 Wall Street analysts monitored by FactSet, 51 assign Buy ratings to the shares, with a collective price target of $523.67.
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