Key Takeaways
- AVGO shares declined 14% during June before recovering approximately 3% in Wednesday’s premarket session following an optimistic J.P. Morgan analysis
- The investment bank maintained its Overweight stance with a $580 price objective, suggesting potential 54% gains
- Wolfe Research forecasts Broadcom’s XPU business could generate $250–$300 billion by fiscal year 2028
- Analysts at J.P. Morgan dismiss worries regarding the Google TPU collaboration, confirming the partnership continues as planned
- Among 55 Wall Street analysts surveyed by FactSet, 51 recommend purchasing AVGO shares, with a mean target of $523.67
June proved challenging for Broadcom shareholders. Following a peak closing price of $481.57 on the second day of the month, shares tumbled 14% over subsequent weeks, finishing Tuesday’s session at $376.71. However, Wednesday’s premarket activity offered encouragement, with AVGO climbing roughly 3.2% to reach $388.85.
The upward momentum followed a research note from J.P. Morgan analysts Harlan Sur and Mayur Ramdhani, who recommended investors become “aggressive buyers at current levels.”
The financial institution maintained its Overweight designation while preserving its $580 valuation — representing 54% appreciation potential from Tuesday’s closing figure.
Sur highlighted Broadcom’s expertise in sophisticated chip packaging engineering, its extensive intellectual property assets, and its successful collaboration history with leading tech companies. He emphasized the firm’s role in supporting Google’s development of 14 cutting-edge chip architectures during the previous dozen years.
Investor anxiety has centered around the Google partnership. Chief Executive Hock Tan previously indicated Google would probably expand its chip supplier base, creating market uncertainty.
J.P. Morgan countered these apprehensions, clarifying that Google’s next-generation TPU initiative faces no postponements or terminations, with Broadcom maintaining its manufacturing schedule.
The Alphabet collaboration extends back ten years, encompassing eight successive generations of Google’s Tensor Processing Unit technology.
Projections for XPU Revenue Growth
Wolfe Research contributed additional positive momentum Wednesday. The research firm indicated recent executive discussions suggest Broadcom’s XPU revenue stream could reach $250–$300 billion during fiscal 2028. Complete financial backing from hyperscale cloud providers might enable Anthropic and OpenAI XPU deployments to expand threefold to 15 gigawatts.
This substantial projection has renewed investor optimism following a challenging period for semiconductor equities.
Tuesday’s market weakness extended beyond Broadcom. Nvidia, Micron, AMD, Intel, and Marvell all experienced declines during a widespread semiconductor sector retreat. AVGO alone surrendered 4.4% during that trading day.
Broader economic conditions have created headwinds. The Federal Open Market Committee convened its initial meeting under new Chair Kevin Warsh, with market participants anticipating restrictive monetary policy given persistent inflation pressures. The Nasdaq composite fell 1.2% while the S&P 500 declined 0.6%, making Broadcom’s premarket rebound particularly notable.
Wall Street Maintains Positive Long-Term View
Oppenheimer analyst Rick Schafer, who assigns an Overweight rating with a $535 target price, characterized the sentiment as “bullish” following recent discussions with Broadcom leadership.
Schafer noted fiscal 2026 revenue appears secured with a “clear line of sight to deployments this year,” adding that executives anticipate second-half AI revenue will double compared to the first half.
“We remain long-term buyers,” he stated, while acknowledging that additional upside potential likely extends into 2028.
Broadcom aims for $100 billion in AI chip revenue during 2027. The company currently engineers customized processors for six major clients, including Alphabet and OpenAI. While Nvidia maintains dominance in AI computing infrastructure, Broadcom’s tailored silicon operations have expanded consistently throughout the AI data center construction cycle.
Despite June’s setback, AVGO shares have advanced 11% year-to-date and posted 53% gains over the trailing twelve months. The stock’s 52-week trading range spans from $244.17 to $495.00, with Wednesday’s premarket level of $383.21 positioned considerably below the upper boundary.
Among the 55 analysts monitored by FactSet, 51 assign Buy ratings to the stock, establishing a consensus price objective of $523.67.
