Despite Post-Earnings Drop, Wall Street Analysts Eye New Highs for Broadcom Stock

Key Points

• Broadcom shares slipped after earnings even though the company reported strong fiscal third-quarter results and a sharp increase in AI semiconductor revenue.
• Analysts remained broadly bullish after the report, but price target changes showed disagreement over near-term guidance, supply constraints and customer concentration.
• Broadcom’s long-term AI revenue outlook still supports the bull case, but investors are watching Google TPU share, MediaTek’s role and execution through fiscal 2028.

Despite providing investors with many impressive metrics, Broadcom NASDAQ: AVGO stock couldn’t get off the ground after the firm's latest earnings report. The day after earnings, Broadcom declined by 2.7%, a modest decline, but clearly not what many investors were hoping for.

Even with that disappointment, a key segment of the investment community continued to show strong support for Broadcom: Wall Street analysts. In aggregate, Broadcom saw its price targets move up after earnings. However, not all analysts viewed the report favorably, with multiple firms moving their targets down or lowering their ratings on the stock. Nonetheless, the analyst community still points to significant gains ahead for the chip giant, with many projecting the stock to move above its previous all-time high closing price.

Broadcom Targets Rise as Analysts Debate the AI Outlook

Following Broadcom’s earnings, MarketBeat tracked several price target increases and several price target decreases, suggesting that analysts did not fully align on the report’s implications. However, overall, analysts' sentiment remained constructive.

The MarketBeat consensus price target sits around $505, implying about 36% upside from recent levels and suggesting analysts still see room for the stock to move above its prior all-time high.

Rosenblatt Securities and Cantor Fitzgerald were among the analysts most impressed by Broadcom’s report. Rosenblatt moved its target up by 20%, from $500 to $600. Meanwhile, Cantor Fitzgerald’s target rose over 14% from $525 to $600. Their targets are now among the highest on Broadcom, implying upside of more than 60%.

Cantor Fitzgerald acknowledged investor concerns regarding the macroeconomic outlook, and that rising AI-related debt could impact future AI spending. However, the firm also said it sees potential for Broadcom’s growth to accelerate in 2028. Broadcom is already guiding for AI semiconductor revenue of $58 billion in fiscal 2026, about $115 billion in fiscal 2027, and $230 billion in fiscal 2028.

Cantor Fitzgerald may believe Broadcom could exceed its 2028 AI chip sales guidance, which is currently at $230 billion, causing growth to accelerate rather than fall off. This may not be unreasonable, given that Broadcom’s growth is currently supply-constrained. Should various supply constraints ease over time, it could allow Broadcom to exceed its 2028 growth expectations.

DA Davidson Cites Near-Term Guidance

On the other hand, DA Davidson, TD Cowen, and Truist Financial were among the analysts who lowered their targets after Broadcom’s report. DA Davidson reduced its target to $350, TD Cowen lowered its target to $475, and Truist’s target fell to $520. UBS also downgraded Broadcom from Buy to Hold. DA Davidson’s target is now among the lowest on Broadcom, implying slight downside in the stock.

DA Davidson noted that Broadcom’s near-term guidance failed to meet high investor expectations. This comes as Broadcom’s revenue guidance for fiscal Q4 2026 was $34.8 billion, around $200 million below consensus estimates. This argument may also extend to Broadcom’s 2027 AI chip sales guidance of $115 billion, which increased from “over $100 billion.”

Morgan Stanley was among the analysts whose targets did not shift significantly in response to Broadcom’s results. The firm issued a very small 0.6% price target increase after the report, moving its forecast to $505 per share. Although analyst Joseph Moore called the results "impressive," he also noted concerns about Broadcom’s relationship with Alphabet NASDAQ: GOOGL.

During Broadcom’s earnings call, the company acknowledged that MediaTek OTCMKTS: MDTKF was also a partner in Alphabet’s tensor processing unit (TPU) program. While this admission shows that such rumors were true, it does not provide a clear understanding of how much share Broadcom will have in the program versus MediaTek.

Marvell Technology NASDAQ: MRVL also participates in Alphabet’s TPU ecosystem, although the same calculus applies here, with Marvell’s position arguably being even less clear than MediaTek’s. Notably, J.P. Morgan Chase analyst Harlan Sur believes Broadcom will remain Alphabet’s largest partner, keeping at least two-thirds share of the TPU program.

Analyst Support Keeps Broadcom’s Bull Case Intact

In the end, Broadcom maintained very strong support from Wall Street analysts, despite shares moving into the red after its report. Among 34 analyst ratings, Broadcom has received 30 Buys, four Holds, and no Sells, showing that the post-earnings skepticism has not meaningfully dented the broader bull case.

That support does not erase the near-term questions around guidance, supply constraints, or Alphabet’s TPU program. But it does show that most analysts still see Broadcom’s AI revenue ramp as powerful enough to keep the long-term bull case intact.