BofA Securities raises Broadcom stock price target to $300

On Friday, BofA Securities analysts increased the price target for Broadcom Limited (NASDAQ: NASDAQ:AVGO) stock to $300 from $240, maintaining a Buy rating. Currently trading near its 52-week high of $265.43, Broadcom has delivered an impressive 88% return over the past year. The adjustment follows Broadcom’s inline second-quarter results and third-quarter outlook, driven by a product transition in custom chips and challenges in non-AI sales.

Broadcom has raised its AI outlook for the second half of 2025 and fiscal year 2026, projecting approximately 60% year-over-year growth. With a robust revenue growth of 40% in the last twelve months and impressive gross profit margins of 76%, this outlook surpasses the previous growth estimates of 42% and 32% year-over-year. The company attributes the upgrades to stronger deployments of compute for inference, aligning with industry peers.

Despite not updating its fiscal year 2027 AI total addressable market, Broadcom’s AI revenue consensus estimates remain below $45 billion, indicating potential for further upgrades. The analysts have increased sales projections for fiscal years 2025, 2026, and 2027 by 1%, 5%, and 10%, respectively, due to stronger AI performance offsetting weaker non-AI and software sales. According to InvestingPro, which offers 20+ additional insights about Broadcom, the company maintains strong financial health with an overall score of "GREAT."

The price target adjustment is based on a 35x calendar year 2026 price-to-earnings ratio, up from the previous 30x, reflecting the stronger AI outlook. With a current P/E ratio of 116.5x and a market capitalization of $1.22 trillion, Broadcom remains a top computing and sector pick due to its capital appreciation potential and consistent dividend growth, having raised its dividend for 15 consecutive years.

In other recent news, Broadcom Limited has seen several analyst firms adjust their price targets in light of new developments. Mizuho (NYSE:MFG) raised its price target to $310, citing Broadcom’s strong April quarter results and its guidance for the July quarter at approximately $15.8 billion, which slightly exceeds the consensus. The company reported AI revenue of approximately $4.4 billion in the April quarter and expects this to grow to $5.1 billion in the July quarter, reflecting a 16% increase. Piper Sandler also increased its price target to $300, highlighting Broadcom’s solid April quarter performance and anticipated 60% year-over-year growth in its AI semiconductor segment for the third fiscal quarter.

UBS adjusted its price target to $290, driven by positive commentary on AI demand and potential revenue growth for 2026 that exceeds market expectations by about 10%. The analysts projected earnings per share for 2026 to reach around $9, with 2027 potentially hitting $10. Morgan Stanley (NYSE:MS) raised its price target to $270, noting Broadcom’s strong position in the AI sector and the potential addition of up to four new customers. Meanwhile, JPMorgan increased its price target to $325, maintaining an Overweight rating, following a favorable patent ruling for Acadia Pharmaceuticals, which could impact Broadcom’s strategic positioning.

Broadcom’s strategic opportunities in the AI sector and its current market dominance have been emphasized by analysts, despite some near-term challenges. The company’s financial outlook remains robust, with industry-leading gross and operating margins forecasted for fiscal year 2025. These developments indicate Broadcom’s continued strength and growth potential in the evolving AI landscape.

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