Key Highlights
- Stacy Rasgon from Bernstein assigns Broadcom an “outperform” rating, calling its current price “absurdly attractive”
- Analyst notes AI infrastructure demand “shows no signs of slowing”
- Most recent quarterly results showed 16% revenue growth and 173% profit surge
- Rasgon projects earnings per share exceeding $20 by fiscal 2027, compared to $5.12 over the trailing twelve months
- Cantor Fitzgerald reaffirms Overweight stance with $525 target; Rosenblatt raises target to $500
Broadcom (AVGO) shares climbed 4.7% during Monday’s trading session following a highly optimistic research note from Bernstein analyst Stacy Rasgon, who highlighted the chipmaker as a premier opportunity in the AI infrastructure space.
Rasgon assigned an “outperform” rating to Broadcom and disclosed that Bernstein maintains a position in the stock within its own investment portfolio. The analyst issued a parallel recommendation on Nvidia (NVDA), which gained 1.65% in the same session.
The timing of this analyst endorsement is particularly noteworthy. After reaching a peak of $413 per share on December 10 of last year, Broadcom experienced a roughly 22% decline as broader market enthusiasm for artificial intelligence investments began to wane.
Rasgon challenged this bearish sentiment directly. “AI demand currently shows no signs of slowing,” he stated, referencing Broadcom’s latest quarterly performance as evidence. The semiconductor giant delivered a 16% increase in revenue alongside a remarkable 173% surge in profitability.
With AVGO shares hovering near $321, Rasgon characterizes the current valuation as compelling. His analysis projects earnings per share reaching $20 or higher by fiscal 2027, implying the stock trades at approximately 16 times forward earnings based on today’s price levels.
Breaking Down the Earnings Trajectory
That forward earnings multiple becomes particularly striking when examining Broadcom‘s starting point. Over the past twelve months, the company generated only $5.12 in earnings per share. Achieving the $20 target by 2027 would represent approximately 400% earnings expansion over two years — translating to roughly 100% annual growth.
Based on trailing earnings, the stock currently commands a valuation around 60 times earnings. Rasgon’s thesis is clear-cut: if the projected growth materializes, today’s 60x multiple will appear inexpensive in retrospect.
Several other Wall Street analysts are aligning with this positive outlook. Following Broadcom’s first-quarter fiscal 2026 earnings release, Cantor Fitzgerald reiterated its Overweight rating on March 5, maintaining a $525 price objective.
Cantor highlighted management commentary indicating networking products could represent as much as 40% of overall AI-related revenue streams. The firm subsequently increased its earnings projections and now anticipates $23–$25 per share as attainable, upgrading from its previous $20 estimate for fiscal 2027.
Wall Street Price Targets Climb Higher
Rosenblatt Securities also issued updated guidance on March 5, elevating its price target to $500 while retaining a Buy recommendation. The firm referenced CEO Hock Tan’s statements that fiscal 2027 revenue visibility has “significantly improved.”
Both investment firms emphasized the $100 billion AI semiconductor revenue threshold as a critical benchmark. Cantor projects Broadcom will exceed this milestone in fiscal 2027, forming the foundation for both firms’ constructive investment views.
Cantor named Broadcom among its top investment selections alongside Nvidia, strengthening the perspective that demand for AI semiconductors continues to accelerate despite recent share price volatility.
Broadcom generates revenue through two primary divisions: Semiconductor Solutions and Infrastructure Software.
At the time of publication, AVGO was changing hands at $321.15, representing a $11.29 gain for the session, with total market capitalization standing at approximately $1.5 trillion.
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