Mizuho Securities reiterated an Outperform rating and a $530 price target on Broadcom, citing accelerating artificial intelligence revenue growth and robust cash generation despite supply constraints.
The firm’s valuation remains below the $675 high estimate tracked by InvestingPro and below Bernstein’s $575 target, though above TD Cowen’s $475 estimate. Broadcom’s shares were trading near $367 at the time of the note, trading below InvestingPro’s estimated fair value.
Broadcom’s fiscal third-quarter results underscored its AI-driven momentum. Adjusted earnings reached $3.32 per share, exceeding Wall Street’s $3.21 forecast, while revenue totaled $29.59 billion, topping estimates of $29.25 billion. Sales surged 86% year-over-year, driven by demand for AI chips, and free cash flow hit a record $13.7 billion.
The company’s AI revenue reached $21.7 billion in the October quarter, up 30% sequentially, and is projected to grow 100% annually through fiscal 2027 and fiscal 2028. Fiscal 2027 AI revenue is forecast at $115 billion, with fiscal 2028 expected to double to $230 billion.
Broadcom maintained fiscal fourth-quarter 2026 guidance for revenue of $34.8 billion and a 66% operating margin, in line with expectations. Gross profit margins stood at 76% over the last twelve months, reflecting strong pricing power in high-demand AI segments.
Supply remains constrained in key areas including low-power silicon, memory, and advanced packaging, though customer ramps are accelerating. Anthropic is targeting approximately 16 gigawatts of Broadcom’s XPU capacity, OpenAI is exceeding 6 gigawatts, and Meta is targeting around 3 gigawatts. Mizuho expects Broadcom to retain the majority share of Google’s TPU volumes.
Networking products such as the TH Ultra for scale-up and the TH7 200T switch, which has taped out, are in development, while the v8i product is already shipping.
