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Investing.com - TD Cowen has raised its price target on Broadcom Limited (NASDAQ:AVGO) to $370 from $355 while maintaining a Buy rating on the semiconductor company’s stock. The company, currently valued at $1.44 trillion, has demonstrated robust performance with a 28% year-over-year revenue growth and maintains an impressive gross profit margin of 77.19%.
The price target increase follows what TD Cowen described as "a strong set of results/guide" that the firm suggests was likely expected by investors given the ongoing ramp-up of Broadcom’s tensor processing unit (TPU) business. According to InvestingPro, the company’s strong financial health and growth metrics suggest continued momentum, with multiple positive indicators available for subscribers.
TD Cowen noted that solid near-term performance was "rapidly eclipsed by even more bullish commentary" regarding fiscal 2026 and beyond, with Broadcom management indicating a fourth XPU customer would single-handedly add $10 billion to the second half of fiscal 2026.
The research firm has raised its financial projections for Broadcom "materially" despite acknowledging potential gross margin headwinds as the company scales these new business segments.
While TD Cowen characterized the expected ramp as "steep," the firm indicated it views Broadcom’s growth targets as "doable if XPU engagements ramp and scale."
In other recent news, Broadcom has reported robust fiscal third-quarter results, with AI semiconductor revenues growing 63% year-over-year to $5.2 billion. Analysts have responded positively to these results, with Piper Sandler, KeyBanc, Bernstein, and Rosenblatt all raising their price targets for Broadcom to $375 and $400, respectively. Piper Sandler highlighted Broadcom’s strong artificial intelligence results and noted a new XPU order worth approximately $10 billion, expected to be delivered by the second half of fiscal year 2026. Bernstein pointed out that Broadcom’s earnings of $1.69 per share on $16 billion in revenue exceeded analyst expectations, with both semiconductor and software segments performing well. KeyBanc also emphasized the company’s accelerating growth in AI semiconductor revenues, projecting a 66% year-over-year increase in the fiscal fourth quarter. Meanwhile, BMO Capital Markets has predicted that Celestica will become a key supplier for OpenAI’s custom XPU-based servers, benefiting from its use of Broadcom silicon. These developments reflect Broadcom’s strong position in the AI semiconductor market and its ongoing market share gains.
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