Barclays maintained an overweight rating and a $500 price target on Broadcom after the chipmaker outlined accelerated AI revenue growth through fiscal 2028.
The bank cited Broadcom's long-term projections, which now target AI revenue of $230 billion by fiscal 2028, up from the prior $115 billion target for fiscal 2027. Barclays noted the new guidance implies an 18% discount to its own estimate of $280 billion in total AI revenue based on customer commitments totaling approximately 22.5 gigawatts. The commitments include 10 gigawatts from Anthropic, 5 gigawatts from OpenAI and 3 gigawatts from Google, among others.
Broadcom reported adjusted earnings of $3.32 per share in the fiscal third quarter, exceeding Wall Street expectations of $3.21. Revenue reached $29.59 billion, beating forecasts of $29.25 billion, with an 86% year-over-year increase driven by AI chip demand. Free cash flow hit a record $13.7 billion.
For the fiscal fourth quarter, Broadcom projected revenue of $34.8 billion and an operating margin of 66%. AI revenue in the October quarter is expected to rise to $21.7 billion, a 30% increase from the prior quarter.
Other analysts adjusted their targets following the results. Bernstein raised its price target to $575 with an Outperform rating, while TD Cowen lowered its target to $475 but maintained a Buy recommendation. Mizuho reaffirmed its Outperform rating.
Broadcom's gross profit margin stands at 76% over the trailing twelve months, according to InvestingPro data.
