Barclays raises Broadcom price target from $265 to $400

Barclays raises Broadcom price target from $265 to $400.

Barclays has significantly raised its price target for Broadcom Limited (NASDAQ: AVGO) from $265 to $400, reflecting the semiconductor giant's robust performance and promising future prospects. The upgrade comes on the heels of Broadcom's strong third-quarter earnings report and positive outlook for its AI-driven growth. The investment bank cited the company's impressive gross profit margins, year-over-year revenue growth, and strategic investments in custom ASICs as key drivers behind the increased target.

Broadcom's third-quarter earnings for 2025 were particularly notable, with earnings per share reaching $1.69, slightly above the forecasted $1.66, and revenue totaling $16 billion compared to the anticipated $15.82 billion [1]. The company's strong execution and AI-driven growth narrative have been compelling investors, despite some skepticism about long-term forecasting. Barclays highlighted a new ASIC customer expected to significantly contribute to revenue in 2026, aligning with the firm's existing Street-high estimate of $30.6 billion for fiscal 2026 ASIC revenue [2].

The semiconductor company's recent momentum has been impressive, with the stock delivering a 102.5% return over the past year and currently trading near its 52-week high of $317.35 [1]. Morgan Stanley raised its price target to $382, emphasizing Broadcom's growth opportunities in AI technologies [3]. The investment bank noted the company's strong execution, reflected in its robust 77.2% gross profit margins and 28% year-over-year revenue growth. Despite some caution regarding AI market share claims and potential challenges such as ASIC program delays and export control risks, Broadcom's track record of execution makes its growth narrative compelling.

Broadcom's AI growth trajectory justifies its premium valuation, but investors must remain vigilant. The stock's elevated multiples and sector volatility create a "sell-the-news" risk if Q3 results fall short of expectations or if AI spending slows. However, its strategic investments in custom ASICs, recurring revenue from VMware, and leadership in AI networking provide a buffer against near-term headwinds. For now, the stock appears to be a "buy" for long-term investors who can tolerate short-term volatility, but a "hold" for those prioritizing valuation discipline.

References:
[1] Investing.com - Morgan Stanley raises Broadcom stock price target on AI growth outlook
[2] Investing.com - HSBC reiterates Buy rating on Broadcom with $400 price target
[3] Investing.com - Morgan Stanley raises Broadcom stock price target on AI growth outlook