Key Takeaways
- GF Securities upgraded Broadcom (AVGO) with a new $450 price target following revised Google TPU shipment projections
- Revised TPU unit forecasts now stand at 4.5M for 2026 and 7.9M for 2027, significantly above the previous 6M projection
- Among current offerings, only Broadcom’s Ironwood and Sunfish chips have reached customer testing phase
- Management outlined visibility toward exceeding $100B in AI-related revenue by 2027
- Wall Street analysts argue the actual figure could reach $180B–$200B based on gigawatt capacity calculations
Broadcom (AVGO) shares were changing hands at $320.55, posting a 0.71% gain during Wednesday’s morning session.
The semiconductor giant is capturing increased investor interest following GF Securities’ price target increase and mounting speculation that management’s $100B AI revenue projection for 2027 may significantly underestimate actual results.
GF Securities’ Alicia Xia elevated her Broadcom price objective to $450 from a previous level, maintaining her Buy recommendation. This adjustment followed Xia’s upward revision to Google TPU shipment projections.
Her updated forecast calls for aggregate TPU volumes reaching 4.5M units in 2026, expanding to 7.9M in 2027. The 2027 projection represents a substantial increase from her prior 6M unit estimate, primarily attributed to anticipated external sales momentum.
Broadcom’s proprietary TPU unit projections stand at 4.1M for 2026 and 5.8M for 2027. Currently, the company’s Ironwood and Sunfish solutions represent the exclusive products available for client evaluation. MediaTek’s rival Zebrafish chip remains in pre-testing stages, positioning Broadcom ahead in the competitive landscape.
Xia anticipates continued average selling price expansion, with Broadcom’s forthcoming Pumafish processor potentially exceeding $20,000 in 2027 reflecting its advanced architectural complexity.
Debate Over the $100B Projection
The more intriguing narrative centers on whether Broadcom’s internal AI revenue guidance significantly underestimates potential outcomes.
During the company’s March 4 quarterly conference call, CEO Hock Tan stated Broadcom possesses “line of sight” toward surpassing $100B in AI-driven revenue by 2027. While impressive on its surface, several analysts challenged this figure — arguing it’s too conservative rather than optimistic.
Bernstein’s Stacy Rasgon attempted to establish more precise estimates using gigawatts — representing data center power infrastructure — as his measurement framework. His tally of Broadcom’s confirmed customer commitments includes: 3 GW from Anthropic, 1 GW from OpenAI, a minimum 2 GW from Meta, and no less than 3 GW from Google. This calculation yields approximately 9–10 GW for 2027.
Tan validated this assessment, acknowledging Broadcom is “seeing it getting close to 10 gigawatts” in 2027.
Rasgon subsequently applied his revenue-per-GW calculation of approximately $20B. Bank of America’s Vivek Arya corroborated this methodology, referencing Broadcom’s 2026 Anthropic infrastructure — 1 GW projected to generate $20B in sales.
Using $20B per GW multiplied by 10 GW yields a range between $180B and $200B — substantially exceeding management’s stated objective.
Tan offered limited resistance to this analysis. While noting that per-GW revenue fluctuates depending on customer specifications, he conceded the calculations are “not far off.”
Multi-Year Supply Agreements Secured
Broadcom has successfully negotiated supply commitments for advanced-node wafers, high-bandwidth memory modules, substrate materials, and T-glass extending through 2028 — surpassing its current forecasting timeframe by one year.
Melius analyst Ben Reitzes highlighted that Broadcom appears to be among the first companies securing these critical components with such extended visibility.
The prevailing Wall Street consensus price target for AVGO currently registers at $435.30, suggesting approximately 36% appreciation potential from present trading levels, based on aggregated ratings from 33 covering analysts.
