U.S. core PCE rises 2.9% in August, in line with estimates
Despite artificial intelligence (AI) chip giant Broadcom recently giving back a substantial amount of its 2025 gain, Wall Street analyst price targets are moving to never-before-seen levels. Since Broadcom reached an all-time high closing price of around $369 on Sept. 10, shares are down approximately 8% year-to-date.
This comes even though multiple analysts have issued price targets on the stock above the $400 mark.
This marks the first time MarketBeat has tracked price targets on Broadcom above that level. Below, we’ll break down the recent analyst data surrounding Broadcom and provide perspective on its battle with NVIDIA.
2 Analysts Eclipse AVGO’s Previous $400 Record Price Target
On Sept. 12, analyst Vijay Rakesh of Mizuho issued a whopping $415 price target on Broadcom, lifting his forecast substantially from $355. Then, Arthur Lai at Macquarie issued an even more bullish target. Lai initiated coverage on Broadcom, placing a $420 price target on the stock.
This is interesting as no other analyst has been willing to place a target above $400. Frank Lee at HSBC was the first to do so on June 24. At that time, Lee’s target was far and away the most bullish of any analyst; it exceeded the next highest target of $340 by nearly 18%.
Lee’s extremely bullish stance is looking increasingly validated; six other analysts now place $400 targets on Broadcom, and the two above are even higher. Lee’s bullish thesis hinged on the expectation that Broadcom would serve as many as seven application-specific integrated circuit (ASIC) customers by fiscal year 2027.
Broadcom also refers to ASICs as XPUs. In its latest earnings call, Broadcom revealed that it had added another XPU customer, bringing its overall count to four. Although Broadcom still has a long way to go before gaining seven customers, Lee’s assertion is progressing in the right direction.
With Broadcom proving its ability to add a new XPU customer, others are jumping on the bandwagon.
Macquarie and Mizuho Project +20% Upside in AVGO Shares
Overall, the MarketBeat-tracked consensus price target on Broadcom is around $356.50, implying a 5% upside in shares. However, Mizuho and Macquarie see much more considerable gains to come.
Their price targets imply that shares could increase by 21% and 24%, respectively. Achieving Macquarie’s target would put Broadcom under a $2 trillion market capitalization.
The potential for gains in Broadcom shares looks more reasonable after the stock’s recent selloff. It now trades at a forward price-to-earnings (P/E) ratio of 40.5x, down solidly from its all-time high forward P/E of 44x on September 10.
However, the figure is still vastly above Broadcom’s average forward P/E of approximately 25x during the last three years. It is also well above the approximately 30x forward P/E of the S&P 500 technology sector. Still, Broadcom clearly warrants a premium valuation.
It is winning the AI ASIC space with its XPUs and dominating the hypervisor industry with its impressive VMware acquisition. However, how much of a premium valuation markets should give Broadcom is up for debate.
Broadcom vs. NVIDIA: A False Choice?
There is growing discussion that Broadcom might be becoming more crucial to the future of AI than NVIDIA. This is supported by the fact that Broadcom’s AI semiconductor division is now expanding more rapidly than NVIDIA’s.
Last quarter, revenues for NVIDIA’s data center segment increased by 56% compared to the prior year. Meanwhile, Broadcom’s AI semiconductor business grew by 63%, and the company expects that growth rate to accelerate to 66% in the next quarter.
Further supporting this idea is Broadcom’s new XPU customer, reportedly OpenAI, the maker of ChatGPT, which has significantly accelerated the AI revolution.
However, recent news from NVIDIA shows it is not in a “winner-take-all” competition with Broadcom. On Sept. 22, NVIDIA announced a new partnership with OpenAI. NVIDIA will invest $100 billion in the firm. Meanwhile, OpenAI will “deploy at least 10 gigawatts of AI data centers with NVIDIA systems representing millions of GPUs for OpenAI’s next-generation AI infrastructure."
Similar to Broadcom, NVIDIA is expected to earn substantial revenues from OpenAI in the future. This indicates that despite the competition between Broadcom and NVIDIA, customers are open to using both solutions.
Thus, for investors, Broadcom and NVIDIA are not mutually exclusive stocks. Both firms are likely to continue being instrumental to AI for years to come and warrant serious consideration from investors.
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