Broadcom's Price Target Raised Amid AI Revenue Optimism
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 31 2026
0mins
Should l Buy AVGO?
Source: Yahoo Finance
Broadcom Inc (AVGO) saw its stock price drop by 5.00% as it crossed below the 5-day SMA, reflecting a challenging market environment.
The decline comes despite a recent price target upgrade from Wells Fargo, which raised Broadcom's target from $410 to $430 and upgraded its rating to Overweight. Analysts have also increased revenue forecasts for 2026 and 2027, indicating strong expectations for AI-driven revenue growth, particularly in AI Compute and Networking segments. This optimism contrasts with the broader market's downturn, where the Nasdaq-100 and S&P 500 fell by 1.47% and 1.44%, respectively, suggesting sector rotation may be influencing Broadcom's stock performance.
The implications of this news suggest that while Broadcom faces short-term price pressures, the long-term outlook remains positive due to anticipated growth in AI-related revenues, which could stabilize and eventually boost its stock price.
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Analyst Views on AVGO
Wall Street analysts forecast AVGO stock price to rise
30 Analyst Rating
29 Buy
1 Hold
0 Sell
Strong Buy
Current: 325.170
Low
370.00
Averages
457.75
High
525.00
Current: 325.170
Low
370.00
Averages
457.75
High
525.00
About AVGO
Broadcom Inc. is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software and security solutions. The Company operates through two segments: semiconductor solutions and infrastructure software. Its semiconductor solutions segment includes all of its product lines and intellectual property (IP) licensing. It provides a variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications. Its infrastructure software segment includes its private and hybrid cloud, application development and delivery, software-defined edge, application networking and security, mainframe, distributed and cybersecurity solutions, and its FC SAN business. It provides a portfolio of software solutions that enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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AI Chip Efficiency: The company reported impressive efficiency metrics for its artificial intelligence chips.
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- Capital Expenditure Forecast: Amazon, Alphabet, and Meta are expected to collectively invest over $500 billion in 2026 for data center construction and equipment purchases, with Nvidia and Broadcom benefiting significantly as chips account for nearly half of data center construction costs.
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See More
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- Nvidia's Market Dominance: With approximately 90% market share in graphics processing units (GPUs), Nvidia's CUDA software platform provides robust support for AI training, which is expected to further boost its revenue growth.
- Broadcom's Custom Chip Advantage: Broadcom is assisting customers in developing custom AI application-specific integrated circuits (ASICs), which, while less flexible than GPUs, offer advantages in energy efficiency and cost-effectiveness, likely leading to rapid market share growth.
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- Record Backlog: The backlog for Broadcom's AI switches has exceeded $10 billion, reflecting the company's critical role in AI data center buildouts and strong market confidence.
- Product Differentiation: Broadcom has launched the industry's first Wi-Fi 8 access point and switch system, aimed at enhancing security and speed for enterprises using AI, thereby further solidifying its market position.
- Competitive Strategy: Broadcom's custom XPUs complement Nvidia and AMD's general-purpose GPUs, allowing the company to grow rapidly in specific niches while avoiding the pressures of direct competition.
See More
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- AI Spending Forecast: Global spending on artificial intelligence is projected to reach $300 billion to $400 billion by 2026, reflecting hyperscalers' immense potential and investment willingness in this technology, which is likely to drive stock prices of Nvidia, Broadcom, and Taiwan Semiconductor higher.
- Total Capital Expenditure: Amazon, Alphabet, and Meta Platforms are expected to collectively invest over $500 billion in 2023 for data center construction and equipment procurement, indicating strong demand for AI infrastructure and further promoting growth in related industries.
- Surge in Chip Demand: Chips account for nearly half of the costs in data center construction, positioning Nvidia and Broadcom to directly benefit from this trend, while Taiwan Semiconductor, as a major chip manufacturer, will continue to profit, ensuring its significant market position.
- Market Valuation Rationality: Despite Nvidia, Broadcom, and Taiwan Semiconductor being projected to achieve impressive revenue growth rates of 64%, 51%, and 34% respectively, the market has not assigned them significant premiums, indicating that these stocks remain highly attractive investment options at current prices.
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