Barclays reiterated an Overweight rating and a $500 price target on Broadcom on Thursday, citing the semiconductor company’s robust AI revenue outlook and strong financial performance.
The bank’s stance follows a wave of upward revisions from peers, including Bernstein, which raised its price target to $575 while maintaining an Outperform rating. TD Cowen, by contrast, lowered its target to $475 but kept a Buy rating, while Mizuho reiterated an Outperform rating.
Broadcom reported fiscal 2026 third-quarter adjusted earnings of $3.32 per share, exceeding Wall Street’s $3.21 estimate, and revenue of $29.59 billion against a $29.25 billion forecast. The beat was driven by an 86% year-over-year surge in AI chip sales, lifting gross profit margins to 76% and free cash flow to a record $13.7 billion.
For the fiscal 2026 fourth quarter, Broadcom guided revenue to $34.8 billion and operating margins to 66%. The company also provided its first fiscal 2028 revenue outlook, projecting AI revenue to reach $230 billion, double the $115 billion target for fiscal 2027. Management noted these long-term projections will not be updated quarterly.
AI demand remains a key driver, with Broadcom’s October quarter AI revenue totaling $21.7 billion, a 30% increase from the prior quarter, according to Mizuho. Customer commitments through calendar 2028 include 10 gigawatts from Anthropic, 5 gigawatts from OpenAI, and 3 gigawatts from Meta, positioning Anthropic as Broadcom’s largest customer in fiscal 2028.
Barclays estimates total disclosed commitments at 22.5 gigawatts, valued at $10 billion to $15 billion per gigawatt, implying potential AI revenue of roughly $280 billion. The current $230 billion guidance represents an 18% discount to this calculation.
Broadcom’s partnership with Google remains intact, with a long-term supply agreement for multi-tens of billions of dollars in annual TPU sales expected to continue in the coming years.
