Broadcom (AVGO) stock dey look like e no go stop anytime soon, e don jump pass 66% since di year start as e dey move closer to $2 trillion valuation. But with dis kind momentum, pressure dey come.
Goldman Sachs Boosts Broadcom Price Target
Goldman Sachs analyst James Schneider just increase im price target for di stock, e dey double down on im buy rating. E dey see Broadcom as di most important "arms dealer" for di AI boom.
But e make am clear say expectation for Q4 dey very high. Investors want strong results, raise, plus healthy fiscal 2026 guide wey pass di expected $11 billion+ for AI sales. So even though Broadcom fit dey win di AI hardware race, Schneider dey warn say even great results fit disappoint people.
AI Inference: A New Revenue Driver
Broadcom dey benefit from di shift from AI training to inference, wey dey become strong revenue engine for hyperscalers. Dis na good news for Broadcom's custom silicon and networking business.
Beth Kindig, veteran technology analyst, talk say Broadcom's advantage pass di fact say custom accelerators dey cheaper than Nvidia's GPUs for inference. Custom silicon dey improve with each generation.
Key Takeaways from Q3 Results
- Q3 revenue na $15.95 billion, e pass estimates for $15.82 billion.
- Top line growth na 22% YoY and 6.3% QoQ.
- Broadcom convert 44% of revenue to free cash flow.
Is Broadcom Overvalued?
Broadcom stock dey trade over 28-times forward sales and 55-times forward cash flows. But Goldman Sachs no see Broadcom as just beneficiary of AI hype, dem see am as one of di few companies wey dey drive di AI revolution.
Schneider increase Broadcom's price target from $380 to $435 (14.5% increase) as e dey enter Q4. E talk about three areas wey investors dey care about most: AI revenue guidance for 2026, sales from Google and OpenAI, and whether dem fit maintain dem high margins as dem custom XPU business dey grow fast.