TLDR
- Broadcom’s price target lifted to $435 by Goldman Sachs, a 15% increase from $380
- Stock has gained 66% in 2025 and approaches $2 trillion market valuation
- Custom AI chips for Google and OpenAI make up 65% of AI-related revenue
- Q4 earnings on December 12 expected to show $6.2 billion in AI chip sales
- Goldman forecasts fiscal 2026 AI revenue to grow over 100% year-over-year
Broadcom just got a vote of confidence from Goldman Sachs. The firm raised its price target to $435 from $380 while maintaining a buy rating. That puts the potential upside at 15% from Tuesday’s closing price.
The upgrade comes ahead of Q4 earnings scheduled for December 12. Analysts expect revenue between $17.0 billion and $17.4 billion with earnings per share around $1.87. Broadcom’s guidance sits at the top of that range.
The stock has been on a tear. Shares are up 66% year-to-date and 133% over the past 12 months. The company is closing in on a $2 trillion market cap. But that success brings heightened expectations.
Goldman analyst James Schneider called Broadcom the premier “arms dealer” in the AI race. The company designs custom chips that power AI infrastructure for the biggest names in tech. Those relationships are turning into serious revenue.
Google and OpenAI Drive Revenue
Broadcom’s custom AI accelerators, known as XPUs, are the real story here. These chips now represent 65% of the company’s AI-related sales. Google and OpenAI are the anchor customers.
Google’s Gemini 3 launch relies on Broadcom-designed TPUs. OpenAI has placed orders exceeding $10 billion for custom hardware. A fourth major customer recently joined the mix with another $10 billion commitment.
The AI chip segment is projected to generate $6.2 billion in Q4. That’s a 66% jump year-over-year and accounts for more than one-third of total revenue. Infrastructure software from VMware should contribute another $6.7 billion, up 15%.
Broadcom’s backlog stands at $110 billion. That pipeline extends well into next year and beyond.
What Investors Want to See
Goldman expects Broadcom to guide fiscal 2026 AI revenue above 100% year-over-year growth. That would validate the custom chip strategy at scale.
Schneider pointed to three key metrics investors are monitoring. The fiscal 2026 AI revenue forecast matters most. Google and OpenAI’s contribution to sales is another focus. Margin maintenance as XPU production scales rounds out the list.
The stock trades at over 28 times forward sales and 55 times forward cash flows. Those multiples are elevated. But Goldman sees Broadcom as a builder of essential infrastructure rather than an AI hype play.
Schneider acknowledged the high bar Broadcom faces. Google’s strong performance using Broadcom chips has pushed expectations higher. The market wants more than just solid results. Investors expect a beat, a raise, and guidance showing AI sales above $11 billion for the year.
The upgraded price target reflects Goldman’s view that Broadcom’s partnerships with Google and OpenAI will continue generating strong growth as demand for specialized AI chips and networking equipment surges through 2026.
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