Total revenue hit a record $22.2 billion. <\/p>\n
More AI Stocks: <\/p>\n
CEO Hock Tan<\/a> then guided third-quarter AI revenue to about $16 billion, which would be growth of more than 200% year over year. <\/p>\n Yet the stock still sits about 25% below its 52-week high of $495. Analysts read that pullback as a chance to buy, not a warning sign. <\/p>\n The stock also carries a Strong Buy consensus rating based on 29 analysts who cover it. <\/p>\n To understand the optimism, it helps to know how Broadcom fits into the AI economy. It does three things well. <\/p>\n First, it designs custom AI chips. Instead of buying standard graphics processors, giants such as Google and Meta hire Broadcom to co-design chips built for their exact needs.\u00a0 <\/p>\n These are called ASICs, or application-specific integrated circuits, and they let companies run AI models faster and cheaper. <\/p>\n Second, it makes the networking gear that ties AI data centers together. Thousands of chips need to share data instantly, and Broadcom’s Ethernet switching products handle that traffic. <\/p>\n Third, it owns VMware, the software business it bought for $69 billion in 2023.\u00a0 <\/p>\n That unit brings in steady, high-margin subscription revenue, which cushions the ups and downs of the chip cycle. <\/p>\n The customer deals backing up the growth story <\/p>\n Story continues <\/p>\n Analyst confidence is not built on guidance alone. It is built on signed contracts. <\/p>\n Broadcom’s AI backlog topped $30 billion in a single quarter, far above the $10.8 billion it actually shipped in the second quarter. <\/p>\n The customer list explains why.\u00a0 <\/p>\n J.P. Morgan noted that Broadcom’s engagements now include a multi-generation partnership with Google, a roughly 5-gigawatt next-generation deal with Anthropic starting in fiscal 2027, and OpenAI capacity coming online the same year, Investing.com<\/a> reported. <\/p>\n Related: BMO sees writing on the wall for Broadcom stock after earnings<\/a> <\/p>\n Meta added to that momentum. The social media company committed to one gigawatt of Broadcom custom chips, CNBC<\/a> reported. <\/p>\n These are long-term commitments, which is why analysts feel comfortable modeling growth years into the future. <\/p>\n The analyst with the boldest call on Broadcom <\/p>\n Among the bulls, J.P. Morgan’s Harlan Sur<\/a> stands out. <\/p>\n Sur ranks 17th out of more than 12,500 analysts tracked by TipRanks, with a 70% success rate and an average return of 42.2% per rating, TipRanks<\/a> reported. That track record gives his opinion real weight. <\/p>\n He reiterated a Buy rating and a $580 price target ahead of the third-quarter report, the highest of the widely followed targets.\u00a0 <\/p>\n That figure implies roughly 57% upside from current levels. <\/p>\n Sur expects full-year fiscal 2026 AI revenue to top $56 billion, helped by a strong ramp in Google’s next TPU chips and steady demand for Broadcom’s networking silicon. <\/p>\n He also pushed back on a common worry. Some investors fear that Google adding Marvell as a chip partner threatens Broadcom’s position.\u00a0 <\/p>\n Sur argued those concerns are overstated, since Broadcom’s five-year agreement with Google remains firmly in place. <\/p>\n How Broadcom stock stacks up against its own highs <\/p>\n Broadcom has rewarded long-term shareholders, but 2026 has been choppy. <\/p>\n The stock trades near $370, still about 25% below its 52-week high of $495.\u00a0 <\/p>\n It hit that peak earlier in the year, then pulled back, even as the AI business kept growing. <\/p>\n Here is the recent price picture. <\/p>\n Broadcom’s recent price snapshot <\/p>\n 52-week range: About $287 to $495 <\/p>\n From its high: Shares sit roughly 25% below the $495 peak <\/p>\n Market cap: About $1.76 trillion <\/p>\n That gap between the high and the current price is where analysts see the opportunity. The company kept signing AI deals while the share price cooled. <\/p>\n The risks that could sink the bull case <\/p>\n A 40% target is appealing, but Broadcom is far from a sure thing. Several risks deserve attention. <\/p>\n The biggest is valuation. Broadcom trades at a price-to-earnings ratio above 61, which means the market has already priced in years of strong growth. If AI spending slows even slightly, the stock could drop fast. <\/p>\n The second risk is customer concentration. A small group of hyperscalers drives most of Broadcom’s AI revenue. If one or two of them cut spending, the impact would be severe. <\/p>\n There is also history to consider. After Broadcom’s strong second-quarter report, the stock fell about 13% because management did not raise its long-term AI target.\u00a0 <\/p>\n Strong results are not always enough when expectations are this high. <\/p>\n What investors should do before chasing Broadcom stock <\/p>\n Before buying any single high-growth stock, secure your financial base first. That means keeping an emergency fund you can access quickly and clearing high-interest debt.\u00a0 <\/p>\n A stock like Broadcom, however promising, should sit inside a diversified portfolio rather than serve as a single large bet. <\/p>\n The near-40% upside analysts see is real, and it rests on signed contracts and accelerating demand.\u00a0 <\/p>\n But the same high expectations that create the opportunity also create the risk. Broadcom has to keep delivering to justify the price, and the next few quarters will show whether it can. <\/p>\n Related: Marvell investors must carefully consider latest Google deal<\/a> <\/p>\n This story was originally published by TheStreet<\/a> on Sep 3, 2026, where it first appeared in the Investing<\/a> section. Add TheStreet as a Preferred Source by clicking here.<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"Most investors know Nvidia as the face of the AI chip trade. Fewer pay the same attention to…\n","protected":false},"author":2,"featured_media":613861,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[220,218,219,2337,260330,1711,61,60,233,80],"class_list":["post-613860","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-broadcom","tag-broadcom-s","tag-google","tag-ie","tag-ireland","tag-nvidia","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/613860","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=613860"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/613860\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/613861"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=613860"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=613860"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=613860"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/a> Broadcom has become one of the most important suppliers in the AI data center buildout.SOPA Images \/ Getty Images What Broadcom actually sells to AI companies <\/p>\n