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Investing.com - HSBC reiterated a Buy rating on Broadcom Limited (NASDAQ:AVGO) with a $400.00 price target following the company’s announcement of a new ASIC customer. The semiconductor giant, which has delivered an impressive 102% return over the past year, is currently trading near its 52-week high. According to InvestingPro analysis, Broadcom maintains impressive gross profit margins of 77%.
The semiconductor company revealed it has onboarded its fourth ASIC customer, which is expected to add $10 billion in ASIC revenue for fiscal year 2026, bringing total projected ASIC revenue to $30 billion for that period.
This projection aligns with HSBC’s existing Street-high estimate of $30.6 billion for Broadcom’s fiscal 2026 ASIC revenue, which the firm had outlined in its August 29 preview note.
HSBC noted that Broadcom recently received an upward revision to its fiscal 2026 CoWoS wafer allocation at TSMC, increasing from 120,000 to 150,000 wafers, representing year-over-year growth of 81%.
While the latest fiscal 2026 ASIC guidance matches HSBC’s base case estimates, the firm’s bull case scenario suggests potential for a 26% increase in ASIC revenue from the base case of $30.6 billion to $38.5 billion, contingent on CoWoS consumption reaching 180,000 wafers.
In other recent news, Broadcom Inc. reported strong earnings for the third quarter of 2025, with earnings per share reaching $1.69, slightly above the forecasted $1.66. The company’s revenue also exceeded expectations, totaling $16 billion compared to the anticipated $15.82 billion. These results reflect positively on Broadcom’s performance and future outlook. Additionally, Barclays and BofA Securities both raised their price targets for Broadcom to $400, citing growth in the company’s AI chip business. Barclays highlighted a new application-specific integrated circuit customer expected to significantly contribute in 2026. Meanwhile, Morgan Stanley increased its price target to $382, emphasizing Broadcom’s growth opportunities in AI technologies. Wolfe Research maintained its Peerperform rating, noting the addition of a fourth XPU customer expected to boost revenue in the latter half of 2026. These developments underscore the positive sentiment surrounding Broadcom’s future prospects in the AI sector.
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