Broadcom stock (NASDAQ: AVGO) has emerged as a rare consensus pick among major Wall Street houses for 2026.
Bank of America, JPMorgan, and Jefferies all point to custom AI chips and high-speed networking as the company’s growth runway.
The semiconductor giant sits at an inflection point as hyperscalers shift away from pure GPU dependence toward proprietary accelerators designed specifically for their workloads.
The theory is straightforward, as Google, Meta, OpenAI, and others build in-house AI silicon, Broadcom becomes essential infrastructure.
The company provides design expertise, packaging capabilities through its 3.5D XPU platform, and networking switches like Tomahawk 6 that tie everything together.
This vertical slice of the AI stack, custom silicon plus the networking plumbing, is what draws bulls to Broadcom for the next phase of spending.
Banks cite ASICs and networking as Broadcom’s edge
Bank of America analyst Vivek Arya named Broadcom a top large-cap chip pick for 2026, emphasizing custom chips as a way for cloud providers to control performance and costs.
Arya raised his 12-month price target to $500 from $460 and lifted fiscal 2026 and 2027 earnings estimates by 8% each.
The analyst cited a $73 billion AI backlog with management suggesting paths to $50 billion and $100 billion in AI revenue in fiscal 2026 and 2027, respectively.
JPMorgan’s Harlan Sur echoes that bullishness. Amid rising datacenter capital expenditure, Sur expects Broadcom to surpass $50 billion in AI-related revenue in fiscal 2026, up from an estimated $20-21 billion in fiscal 2025.
That represents roughly 150% growth year-over-year, with momentum driven by Google’s TPU ramp, Meta’s custom accelerator production, and early OpenAI XPU work launching in the second half of 2026.
Jefferies analyst Blayne Curtis designates Broadcom as his top pick, saying custom chip demand is at an inflection point.
Google, Meta, and OpenAI are all accelerating deployments of homegrown silicon, Curtis noted in November.
Jefferies raised its price target to $480 and later to $500, flagging the potential for OpenAI’s Titan 1 chip to contribute at least $10 billion in revenue by the first half of 2027.
Execution and margins remain watchpoints
The analyst consensus paints a compelling picture.
Twenty-six to thirty analysts covering Broadcom stock have assigned a “Strong Buy” rating, with average 12-month price targets ranging from $415 to $430, implying roughly 27 to 32% upside from mid-December levels near $326.
The high end of estimates reaches $500, suggesting that a successful execution story could justify substantially higher valuations.
Yet, Street caution exists on the margins.
Broadcom’s gross margins have come under pressure as custom ASIC shipments ramp, with Bank of America lowering fiscal 2026 and 2027 gross margin forecasts to 7%3 and 71% respectivel.y.
The figure is a substantial drop from prior expectations of 75.4 and 73.6%.
Rising complexity in custom chip design and the mix shift toward lower-margin XPU work, relative to legacy networking products, explains the pressure.
Furthermore, valuations are stretched.
At 33 times fiscal 2027 earnings estimates, Broadcom commands a historically wide premium to Nvidia’s 24 times multiple, raising questions about whether the stock can deliver returns that justify that gap.
Customer concentration also merits scrutiny. While Google has been Broadcom’s primary custom chip customer for years, new customers ramping up should diversify revenue flows.
Yet any slowdown in cloud capex or delays in hyperscaler ASIC production could crimp guidance, said analysts.
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