New All-Time Highs Coming for Broadcom? Wall Street Says Yes

Key Points

• Broadcom stock got a significant bout of price-target upgrades after earnings, but investors wouldn't know it by looking at the price action.
• The latest price target data suggests Broadcom could rise by 20%, indicating the stock has the potential to blow past previous highs.
• Why is Wall Street even more bullish on this AI juggernaut, despite shares still being down since its last earnings release?

Based on price action, Broadcom’s NASDAQ: AVGO latest financial results didn’t impress markets, but they did impress Wall Street analysts. Since the company released its Q2 2025 financial results on June 5, MarketBeat has tracked over 10 Wall Street analysts who have raised their price targets on the stock. However, the day after the release, Broadcom shares closed down 5%. As of the June 18 close, the stock remains down more than 3% from its pre-earnings closing price. This divergence in price action and Wall Street targets indicates an untapped opportunity in Broadcom shares.

So, just how much do these analysts think Broadcom stock can rise? Furthermore, why is there a divergence between Broadcom’s price action and Wall Street expectations? Diving beyond the headline numbers and into the earnings call commentary reveals the answer. All return and implied upside figures use Broadcom’s June 18 closing share price of just over $251 as their basis.

Wall Street Broadly Upgrades Broadcom; Recent Data Suggests 18% Upside

As of the June 18 close, the MarketBeat-tracked consensus price target for Broadcom is just over $276. This figure suggests nearly 10% upside in shares. However, focusing only on the price target updates released after June 5, the day of Broadcom’s Q2 earnings report, presents a much more bullish outlook. Among those updates tracked by MarketBeat, the average price target is just below $297. This figure, which considers the latest available information, indicates an upside of 18% for Broadcom shares. For a stock as closely watched as Broadcom, this represents a significant upside potential.

Another interesting data point to consider is the average change in these analysts' price targets compared to their previous targets. On average, these analysts increased their price target on Broadcom by 15% after earnings. This contrasts sharply with the over 3% drop in shares seen since the results. It is another sign suggesting there is an opportunity in Broadcom shares. Analysts clearly indicate that the stock should have risen after earnings, but it fell instead.

The 'Why' Around Wall Street’s Big Upgrades: The Devil Is in the Details

These price target upgrades reveal how Wall Street felt about the semiconductor giant’s earnings, but the equally important question is why. At first glance, it doesn’t seem too difficult to understand why Broadcom shares didn’t perform well after earnings. The results were solid, but the company didn’t beat estimates on sales or adjusted earnings per share in resounding fashion. Its Q3 guidance was also just barely better than expected.

More or less, Broadcom hit its numbers right on the mark. Without a big positive surprise, shares of this nearly $1.2 trillion company were unlikely to rise. Additionally, just one day before releasing Q2 results, Broadcom traded at its all-time high closing price. This increased the risk of a downside move unless the firm beat expectations significantly more convincingly.

However, the company’s earnings call revealed information that was key to Wall Street substantially raising its price targets. Broadcom’s AI semiconductor business, the segment that investors care most about, grew by 46% last quarter. In Q3, the company expects growth of 60%. In relation to this, Chief Executive Officer Hock Tan said, “We do anticipate now our fiscal 2025 growth rate of AI semiconductor revenue to sustain into fiscal 2026."

After some questioning and clarification from analysts, they reached a general consensus that Tan expects an approximately 60% AI growth rate to continue into 2026. The company has seen its AI semiconductor growth rate come down significantly recently. In Q4 2024, growth was 150%, steadily decelerating to 46% last quarter.

The forecast for 60% growth through 2026 suggests that the company expects to reaccelerate AI growth and sustain that growth for a year and a half. This is a very good sign for the company as it indicates that rabid demand for its AI solutions is not falling off. Also, there were signs of upside potential for the company's new Tomahawk 6 networking chips. Broadcom also has four prospective hyperscale customers that it could convert, contributing to the upside potential.

AVGO: Sustained AI Growth Rates Are Good for Shares

Overall, despite not crushing headline expectations, Broadcom provided important insight into the future demand for its AI chips. This is what got Wall Street excited, and what others may have missed.

The latest analyst price targets indicate that shares could approach $300, significantly exceeding previous all-time highs.