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Investing.com - Deutsche Bank has raised its price target on Broadcom Limited (NASDAQ:AVGO) to $400.00 from $350.00 while maintaining a Buy rating on the stock. The semiconductor giant, currently trading near its 52-week high with a market cap of $1.68 trillion, has attracted strong analyst support, with 26 analysts recently revising earnings estimates upward according to InvestingPro data.
The price target increase follows Broadcom’s announcement of a strategic collaboration with OpenAI to deploy approximately 10 gigawatts of accelerators and network systems for next-generation AI clusters.
Under the agreement, the companies will co-develop systems that include both accelerators (ASICS/XPUs) and Ethernet solutions from Broadcom for both scale-up and scale-out applications.
The two companies have been working together for approximately 18 months and plan to begin deploying racks starting in the second half of 2026, with completion expected by 2029.
Deutsche Bank estimates the deal will generate approximately $100 billion in total revenues for Broadcom, noting that this agreement follows similar OpenAI deployments with AMD, as OpenAI seeks to secure processor capacity.
In other recent news, Broadcom has announced a significant partnership with OpenAI to develop and deploy 10 gigawatts of custom AI accelerators. This multi-year collaboration will begin deployment in the second half of 2026 and is expected to continue through the end of 2029. Mizuho has raised its price target for Broadcom to $430 from $410, maintaining an Outperform rating, citing the potential value of $150-200 billion over multiple years from this partnership. CFRA highlighted Broadcom’s "extraordinary" visibility and pipeline as a result of this deal, further emphasizing the company’s strategic position in AI technology. Wolfe Research reiterated its Peerperform rating for Broadcom, noting the company’s provision of Ethernet-based solutions for scale-up and scale-out capabilities in these rack systems. Melius Research maintained its Buy rating and $415 price target, indicating the significant revenue potential from the OpenAI partnership. The collaboration involves Broadcom supplying custom silicon and networking chips, with OpenAI designing the accelerators and systems. This development builds on existing agreements between the two companies for co-development and supply of AI accelerators.
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