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Investing.com -- Mizuho Securities raised its price target on Broadcom Inc (NASDAQ:AVGO) to $410 from $355, citing stronger prospects across the chipmaker’s AI business and continued momentum in custom silicon and networking.
The broker reiterated an Outperform rating on the stock.
Mizuho analysts pointed to Broadcom’s accelerating AI revenue trajectory, lifting forecasts to $39 billion for fiscal 2026 (FY26), $60 billion for 2027, and introducing a 2028 estimate of $75 billion.
That compares with consensus expectations of $36 billion, $55 billion, and $62 billion, respectively.
Alongside the AI revisions, the analysts also increased their broader forecasts. FY26 revenue is now seen at $84.4 billion, up from $79.6 billion previously, with EPS at $9.27 compared with $8.68 before.
For FY27, estimates were lifted to $108 billion in revenue and EPS of $12.13, while new FY28 projections stand at $124 billion and EPS of $14.05.
The broker sees AI revenues growing at a roughly 56% compound annual rate (CAGR) between 2025 and 2028, supported by a rapid ramp in custom ASIC adoption, expanding customer relationships, and the rollout of its ScaleUp and ScaleOut networking platforms.
Broadcom’s custom chips for hyperscalers such as Google and Meta are driving higher average selling prices (ASPs), with each new generation adding complexity and value. The analysts also highlighted upcoming ramps from new customers including OpenAI, Apple, and ARM.
Furthermore, Broadcom’s Tomahawk Ultra and SUE-lite networking products are positioned to extend its reach in AI connectivity, cutting latency and power while improving efficiency for large-scale training and inference.
Analysts see the company’s free cash flow potentially reaching $40 billion annually by fiscal 2026, alongside industry-leading margins of about 77% gross and 66% operating.
Management’s incentive plan also ties directly to AI performance, with CEO Hock Tan’s pay package linked to revenue milestones of $90 billion, $105 billion, and $120 billion by 2030.
Analysts see AI growth "potentially accelerating" in calendar year 2027 and beyond.