This Stock Just Became One of the Most Important AI Picks. Here’s Why
Broadcom just delivered an earnings report that analysts say rewrites the AI semiconductor playbook entirely, and the numbers behind its custom chip roadmap suggest the biggest demand wave is still ahead.
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Broadcom (NASDAQ:AVGO | AVGO Price Prediction) just posted the most consequential AI earnings report of the year.
Q3 FY2026 AI semiconductor revenue hit $16.70 billion, up 221% year over year and 54% quarter over quarter, and management now expects fiscal 2027 AI revenue near $115 billion and fiscal 2028 near $230 billion. That trajectory reframes the entire AI supply chain, and it reframes our model.
Our 24/7 Wall St. price target for Broadcom is $422.39, implying 18.92% upside from a current price of $355.18. Our recommendation is buy with high confidence.
24/7 Wall St. Price Target Summary
| Metric | Value |
|---|---|
| Current Price | $355.18 |
| 24/7 Wall St. Price Target | $422.39 |
| Upside | 18.92% |
| Recommendation | BUY |
| Confidence Level | 90% |
A Volatile Year Ending in a Blowout Quarter
AVGO is up 24.04% over the past year and 6.5% year to date, but the path has been jagged. The stock touched a 52-week high of $494.18 and a low of $289.48, and shares are still down 6.37% over the past month.
Q3 revenue of $29.591 billion beat consensus, and non-GAAP EPS of $3.32 extended a nine-quarter EPS beat streak. Q4 guidance calls for revenue of roughly $34.8 billion, up 93% year over year, with AI accelerating to $21.7 billion, up 236%.
Why Bulls See $530 and Higher
The bull case is written in the transcript. Hock Tan said Broadcom has “a pretty high degree of confidence we will ship $350 billion of AI semiconductors to these customers in the next two years” and is “very much on target to exceed $30 in earnings per share in fiscal 2028.”
Broadcom now has six XPU customers, ships Ironwood TPU v7 to Anthropic and Google, began production of Jalapeno for OpenAI, and has line of sight on 3 gigawatts of Meta MTIA capacity through 2028. Our bull scenario points to $533.50, a 50.2% one-year return.
What Could Go Wrong
Customer concentration is real. Management noted four of the six XPU customers are expected to be particularly large, and gigawatt deployments depend on land, power, HBM memory, substrates, and leading-edge wafers.
Q4 gross margin is guided to 73%, down from 78% a year ago, as XPU mix rises. Bulls counter that operating margin still expanded 240 basis points to 67.9%, so mix pressure is being offset by scale. Our bear scenario lands at $373.83.
How Broadcom Compares to NVIDIA and Marvell
NVIDIA (NASDAQ:NVDA) is the merchant GPU king and the natural benchmark. NVIDIA trades at 24x forward earnings with quarterly revenue growth of 105.9% year over year. That is roughly comparable to Broadcom’s forward multiple on $14.41 forward EPS, and it suggests our target is reasonable given AVGO’s 85.5% revenue growth.
Marvell Technology (NASDAQ:MRVL) is the closest direct competitor in custom ASIC and AI networking silicon. Marvell trades at 50x forward earnings with only 36.5% revenue growth. Broadcom is growing more than twice as fast at a materially cheaper multiple, which makes our 24/7 Wall St. price target look conservative on the peer set.
| Company | Forward P/E | Rev Growth YoY |
|---|---|---|
| Broadcom | ~25x | 85.5% |
| NVIDIA | 24x | 105.9% |
| Marvell | 50x | 36.5% |
Broadcom Price Prediction 2026 to 2030
The 24/7 Wall St. price target is $422.39, buy, with 90% confidence. The tipping factor is visibility: management gave a multi-year AI revenue roadmap tied to named customers and gigawatt deployments.
The bull thesis strengthens if Q4 AI revenue lands at or above the $21.7 billion guide. The thesis weakens if gross margin slips meaningfully below the guided 73% or if any of the top four XPU customers pushes out deployment timing.
| Year | 24/7 Wall St. Price Target |
|---|---|
| 2026 | $372.99 |
| 2027 | $410.65 |
| 2028 | $478.87 |
| 2029 | $535.93 |
| 2030 | $571.45 |
These projections assume Broadcom continues executing on its custom accelerator roadmap and networking attach rate.
Significant upside or downside could result from OpenAI and Anthropic deployment timing, Google TPU volumes, or supply availability of HBM, substrates, and leading-edge wafers. The gigawatt buildout also depends on the power, cooling, and networking suppliers standing behind the data centers themselves, which we profiled in a free report on seven AI infrastructure stocks that aren’t chipmakers.
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Vandita Jadeja is a financial publisher with over a decade of experience writing about financial topics, including investment, savings, retirement, insurance and banking. Vandita is a Chartered Accountant who loves to debunk financial concepts for readers.
Her work has appeared on sites that include The Motley Fool, InvestorPlace, and Benzinga. She covers investing and focuses on stock picks and price prediction for 24/7 Wall St.
When not looking for the next stock investment opportunity, she can be found traveling, reading, chasing sunsets and enjoying her iced latte.
