Broadcom’s (AVGO) AI Chip Momentum Keeps Wall Street Bullish

Broadcom Inc. (NASDAQ:AVGO) is one of the top stocks to buy according to Whale Rock Capital Management. On June 30, Jefferies analyst Blayne Curtis reiterated his Buy rating and $550 price target on Broadcom Inc. (NASDAQ:AVGO). The analyst cited an improving outlook for the company’s AI chip business.

What Does Jefferies See in Broadcom (AVGO) When It Models $30 to $40 in Earnings Per Share for 2028?

A key pillar of Curtis’ thesis is Broadcom’s improving visibility into FY2028 earnings. In fact, Jefferies ran a scenario analysis that points to earnings per share of between $30 and $40 for that year, which translates into a valuation multiple of roughly 10 times earnings.

Curtis also pointed to an on-track roadmap for Broadcom’s custom Tensor Processing Units, the AI chips it co-designs with Google. He noted that this partnership now extends through 2031 under a long-term agreement that guarantees minimum revenue and offers potential upside of more than $500 billion over that period.

Beyond Google, Jefferies highlighted a broadening customer base for Broadcom’s application-specific integrated circuits (ASICs). These are the custom chips built for individual AI customers. According to the analyst, the broadening customer is an encouraging sign that the company is diversifying away from reliance on a single buyer. One example of such diversification is Broadcom’s new partnership with OpenAI, through which the two companies unveiled Jalapeno. This is OpenAI’s first custom AI accelerator chip designed specifically for running large language model inference workloads.

Broadcom Inc. (NASDAQ:AVGO) is a semiconductor and infrastructure software company. It designs, develops, and supplies semiconductor devices and software solutions, including networking connectivity products, wireless device connectivity components, server and storage system solutions, and broadband access technologies.

While we acknowledge the risk and potential of AVGO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AVGO and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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