Citi has increased its price target for Broadcom (AVGO), raising it from $210 to $276 ahead of the company’s second-quarter fiscal 2026 earnings report, which is set to be released after trading ends on Thursday, June 5. Analyst Christopher Danely retained a Buy rating, highlighting the robust performance of Broadcom’s artificial intelligence segment as a primary reason for this adjustment. The new target indicates an estimated 11% potential upside from the current stock levels.
Market expectations are high for Broadcom’s second-quarter earnings, with analysts predicting an earnings per share (EPS) of $1.57, reflecting a substantial year-over-year increase of 43%. The company’s revenue is anticipated to climb by 20%, reaching approximately $14.96 billion. Notably, AI-driven revenue is expected to account for 30% of Broadcom’s total sales in fiscal 2025, showcasing the growing importance of this sector for the company’s overall performance.
Danely pointed out that while the non-AI semiconductor segment has not yet returned to its peak performance—remaining 40% below those levels—a potential recovery in this area could mitigate the impact of gross margin pressures caused by investments in AI.
Over the past year, Broadcom’s stock has surged over 87%, largely driven by a strong demand for its specialized AI chips, known as application-specific integrated circuits. Despite prevailing macroeconomic challenges and tariff issues, industry analysts maintain a positive outlook on Broadcom’s future growth prospects.
This optimistic analysis reflects the ongoing transformation in the technology landscape, particularly in AI, positioning Broadcom as a key player in this rapidly evolving market.