Investing.com - Mizuho has raised its price target on Broadcom Limited (NASDAQ:AVGO) to $410.00 from $355.00 while maintaining an Outperform rating following the company's strong earnings report. The semiconductor giant, which has delivered an impressive 136% return over the past year according to InvestingPro data, continues to demonstrate robust financial health with a remarkable 77% gross profit margin.
The investment firm cited Broadcom's increased fiscal 2026 AI revenue outlook and sees continued upside potential through fiscal years 2026, 2027, and 2028 driven by the company's AI portfolio and ScaleOut/Up opportunity. This optimistic outlook aligns with broader analyst sentiment, as InvestingPro reports 22 analysts have recently revised their earnings expectations upward, with the stock currently trading near its 52-week high.
Mizuho now forecasts Broadcom's AI revenue to reach $39 billion in fiscal 2026, up from its previous estimate of $35 billion, while projecting $60 billion for fiscal 2027 (revised from $45 billion) and $75 billion for fiscal 2028.
The firm expects Broadcom's calendar year 2026 ASIC ramp to grow approximately 95% year-over-year and broaden to include OpenAI, ARM, and Apple, driving XPU average selling prices up approximately 40-200% per generation as complexity increases.
Mizuho also highlighted that CEO Hock Tan's compensation package is tied to achieving approximately $90-120 billion or more in AI revenue by 2030, with AI growth potentially accelerating in calendar year 2027 and beyond. The company's current revenue growth of 28% year-over-year and strong financial health score of "GREAT" on InvestingPro suggest it's well-positioned to pursue these ambitious targets. For deeper insights into Broadcom's valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Broadcom Limited has seen a series of analyst upgrades following its latest quarterly results, highlighting the company's strong performance in the artificial intelligence (AI) sector. CFRA has raised its price target for Broadcom to $380, citing the growth in its AI semiconductor business and the addition of a fourth customer expected to contribute $10 billion in future sales. Truist Securities also increased its price target to $365, noting a significant uptick in Broadcom's AI infrastructure backlog. TD Cowen adjusted its price target to $370, pointing to the strong results and guidance related to Broadcom's tensor processing unit business. Piper Sandler raised its target to $375, emphasizing Broadcom's robust year-over-year growth in AI and the securing of substantial XPU orders. Meanwhile, BMO Capital Markets highlighted Celestica as a key supplier for OpenAI's custom servers, which are expected to use Broadcom silicon. This development underscores the increasing demand for Broadcom's technology in the AI industry. These recent developments reflect the growing confidence in Broadcom's strategic positioning within the AI market.
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