Broadcom Joins Nvidia at the Top

Broadcom may find it difficult to top its bold forecast of 60% AI revenue growth next year, but Melius Research sees any post-earnings pullback as a buying opportunity. Analysts describe the company as operating “in rarified air,” alongside Nvidia.

The bar is high: Nvidia and Marvell both saw stock declines after earnings failed to meet Wall Street’s lofty AI expectations. Broadcom could face the same scrutiny, with guidance already pointing to $30 billion in AI revenue next year. Still, analysts led by Ben Reitzes believe the company is “firing on all cylinders.”

For the July quarter, Wall Street expects $15.8 billion in revenue and adjusted earnings of $1.66 a share, with $9.1 billion from semiconductors. Google and Meta are already boosting spend on Broadcom’s custom AI chips, while Apple, Arm, ByteDance, Elon Musk’s ventures, and even OpenAI are seen as future customers.

Beyond silicon, Broadcom benefits from VMware’s subscription business, Tomahawk 6 networking chips, and its strong position in hyperscaler data centers, where demand for AI accelerators and networking gear continues to grow.

Though trading at 37x forward earnings, Melius calls Broadcom a “must-own” AI stock thanks to its fabless model, diverse customer base, and leadership in both high-performance and cost-efficient AI workloads. The firm raised its two-year price target to $335 from $305 and reiterated a buy rating.