HSBC raised its Broadcom (AVGO) price target from $450 to $600. The bank maintained its Buy rating one day before the company reports fiscal second-quarter earnings.
HSBC expects a revenue surge from application-specific integrated circuits (ASICs) used in artificial intelligence. Momentum is projected to build through fiscal 2026 as Broadcom supplies chips to Google and Meta. The company also initiated new multi-year agreements with Anthropic and OpenAI.
Analyst Frank Lee stated that concerns over losing Google's business are overstated. Broadcom maintains a supply agreement with Google that extends to 2031. HSBC increased its ASIC revenue estimates for fiscal years 2026 and 2027. These new forecasts are more than 20% higher than current consensus estimates.