Broadcom (AVGO) Stock: JPMorgan Raises Price Target to $475 on AI Outlook

JPMorgan just slapped a $475 price target on Broadcom—betting the chip giant's AI play is just getting started.

The AI Engine Behind the Scenes

Forget the hype—Broadcom builds the plumbing. Its custom silicon and networking chips form the backbone for massive AI data centers, the kind powering everything from large language models to autonomous systems. That infrastructure demand isn't slowing down.

Why Analysts Are Bullish

JPMorgan's move signals a belief that Broadcom's integration of VMware and its core networking business creates a unique, vertically-integrated beast. It's not just selling chips; it's selling entire solutions. Competitors are scrambling to keep pace.

The Financial Reality Check

A $475 target implies serious upside, banking on sustained enterprise spending and AI-driven cloud expansion. Of course, on Wall Street, a price target is just a fancy guess dressed up in a spreadsheet—until the next earnings report proves it wrong.

Bottom line: Broadcom's stock isn't just riding the AI wave; it's supplying the surfboards. And right now, the big money says there are plenty more waves to come.

TLDR

• Broadcom reported Q4 earnings that beat expectations with AI semiconductor sales jumping 74% to $6.5 billion
• The company has a $73 billion order backlog and projects $8.2 billion in Q1 2026 AI revenue
• JPMorgan raised its price target to $475 and named Broadcom its top semiconductor pick
• Fiscal 2025 AI revenue is expected to hit nearly $20 billion, with projections reaching $55-60 billion by 2026
• The stock trades at a P/E ratio of 91.82, well above competitors like NVIDIA at 45.9x and the sector average of 33.6x

Broadcom reported fourth quarter earnings that exceeded Wall Street forecasts, driven by explosive growth in its AI semiconductor business. The company’s AI segment brought in $6.5 billion in revenue, representing a 74% increase compared to the same period last year.

Broadcom Inc., AVGO

CEO Hock Tan announced that AI revenue for fiscal 2025 is on track to reach nearly $20 billion. The company projects AI-related semiconductor revenue will hit $8.2 billion in the first quarter of 2026.

The earnings report revealed a massive $73 billion order backlog. This backlog includes major contracts with tech giants, including a potential $100 billion deal with OpenAI and a $10 billion order from an unnamed client.

JPMorgan responded to the strong results by raising its price target for Broadcom from $400 to $475. The bank maintained its Overweight rating on the stock.

Analysts at JPMorgan said the results aligned with their forecasts and were driven by growth in customized AI chips and network business. The bank named Broadcom its top pick in the semiconductor sector.

JPMorgan expects Broadcom’s AI-related semiconductor revenue to grow by roughly 65% year-over-year. The bank projects this revenue stream will reach at least $55-60 billion in fiscal year 2026.

Valuation Questions Emerge Despite Strong Growth

Broadcom currently trades at a price-to-earnings ratio of 91.82. This valuation is much higher than competitors like NVIDIA, which trades at 45.9x, and AMD at 47.6x forward P/E.

The semiconductor industry average P/E ratio sits at 33.6x. Some analysts have calculated a fair value ratio for Broadcom at 66.7x, suggesting the stock may be priced above fundamentals.

The company reported a gross margin decline of 100 basis points in Q4 2025. This drop was attributed to a higher mix of lower-margin AI-related sales.

Broadcom’s Q3 2025 profit margin stood at 25.95%. This figure trails industry leaders like NVIDIA, which maintains gross margins exceeding 60%.

Market Position and Demand Drivers

Broadcom has secured its position as a key supplier to data centers with custom silicon solutions for AI infrastructure. The data center sector is expected to grow to $733 billion by 2026.

The company’s AI growth has attracted attention from hyperscalers, the large cloud computing providers driving demand for advanced semiconductors. JPMorgan cited this robust demand from hyperscalers as a key factor in its bullish outlook.

Morningstar analysts forecast that Broadcom’s AI revenue will double in both fiscal 2026 and 2027. The company’s diversified business model spans software, analog, and wireless segments beyond just AI semiconductors.

JPMorgan’s research report noted that Broadcom’s results exceeded market and buy-side expectations. The bank’s analysts pointed to accelerated growth in the company’s XPU customized AI chips as a primary driver.

The company contributed $6.5 billion in AI revenue to its total revenue of $64 billion in Q4. This represents a growing portion of Broadcom’s overall business as it shifts focus toward AI applications.

Broadcom projects its AI semiconductor revenue will more than double from fiscal 2025 to 2026. The company’s order backlog of $73 billion provides visibility into future revenue streams through 2026 and beyond.