Is Broadcom (AVGO) a Must-Hold AI Play as UBS Raises Price Target to $345?

Broadcom (AVGO) has emerged as a linchpin in the AI semiconductor revolution, leveraging its dominance in networking and custom silicon to secure a commanding position in the hyperscaler-driven market. With AI revenues surging 46% year-over-year to $4.4 billion in Q2 2025 and projecting a 60% increase to $5.1 billion in Q3 2025 [3], the company is capitalizing on insatiable demand for high-performance networking solutions. Its Tomahawk 6 Ethernet switch, capable of 102.4 Tbps, and proprietary Scale Up Ethernet (SUE) architecture are critical enablers for hyperscalers like Google, Meta, and Microsoft, which rely on Broadcom’s technology to power large-scale AI workloads [1].

UBS analyst Timothy Arcuri’s recent price target hike to $345 reflects this momentum. Arcuri cites Google’s TPUv6p AI chips as a key catalyst, noting Broadcom’s custom silicon is integral to their production. With anticipated ramp-ups in TPUv6p manufacturing in H2 2025 and 2026, Arcuri forecasts a 60% year-over-year AI revenue jump for Broadcom in 2025 [1]. This aligns with the company’s reported 90% market share in cloud switch chips and its leadership in co-packaged optics and Cognitive Routing 2.0, which address latency and bandwidth bottlenecks in AI systems [1].

Earnings momentum further validates the bullish case. UBS expects Q3 2025 revenue to hit $15.82 billion, a 21% year-over-year increase, driven by AI networking and custom chip demand [2]. This aligns with Broadcom’s strategic focus on high-margin, high-growth segments, where its 90% cloud switch chip market share and next-gen router innovations create durable competitive advantages [1].

For investors, the convergence of AI-driven demand, UBS’s upgraded target, and Broadcom’s technological edge paints a compelling picture. The stock’s valuation, supported by robust earnings and a $60B–$90B custom chip market outlook [1], suggests AVGO is not just an AI play but a cornerstone of the infrastructure revolution.

**Source:[1] Broadcom's AI Surge: Dominating the Semiconductor ... [https://www.ainvest.com/news/broadcom-ai-surge-dominating-semiconductor-realm-90-market-share-2508/][2] Broadcom (NASDAQ:AVGO) Given New $345.00 Price Target at UBS Group [https://www.marketbeat.com/instant-alerts/broadcom-nasdaqavgo-given-new-34500-price-target-at-ubs-group-2025-08-25/][3] Broadcom Rides on Strong AI Demand: What's the Path ... [https://www.nasdaq.com/articles/broadcom-rides-strong-ai-demand-whats-path-ahead]