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Broadcom (AVGO) stock looks virtually unstoppable, having surged more than 66% year to date and now approaching a $2 trillion valuation.
However, with such speed also comes a new kind of pressure.
goldman sachs analyst James Schneider He raised his price target on the stock, doubling his buy rating.
<p class="yf-1090901"><!-- HTML_TAG_START -->He presents Broadcom as perhaps the most important "arms dealer" in the AI boom.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->At the same time, he also clarifies that expectations for the fourth quarter remain sky-high. Investors want a strong win, growth as well as a healthy financial 2026 guide that is above expectations <strong>$11 billion+</strong> AI in sales.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->So, even though Broadcom may be winning the AI hardware race, Schneider's note highlights the challenge ahead when a stock works so hard, even good results can be disappointing.<!-- HTML_TAG_END --></p> <figure data-testid="article-figure-image" class="yf-8xybrv"><div class="image-container yf-1gfnohs loader" style="--max-height: 640px;"> <div class="image-wrapper yf-1gfnohs" style="--aspect-ratio: 960 / 640; --img-max-width: 960px;"><img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==" alt="<em>Goldman boosts Broadcom to $435 and marks Google/OpenAI AI revenue ahead of Q4</em>Photo by NoorPhoto on Getty Images loading="eager" height="640" width="960" class="yf-1gfnohs loader"/></div></div> <figcaption class="yf-8xybrv"><!-- HTML_TAG_START --><em>Goldman boosts Broadcom to $435 and marks Google/OpenAI AI revenue ahead of Q4</em>.Photo by Noorfoto on Getty Images<!-- HTML_TAG_END --> </figcaption> </figure> <p class="yf-1090901"><!-- HTML_TAG_START -->Schneider raises Broadcom's price target <strong>$380 to $435 (14.5% increase)</strong>Because it is entering Q4 with a setup that is too strong to ignore.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->In the note he talked about the three sectors that investors care about the most.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->These also include the company's <strong>AI revenue guidance to 2026</strong>sales contribution from <strong>Google and OpenAI</strong>And can it maintain its high margins as its custom XPU business grows at an incredible pace?<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START --><strong>RELATED: Salesforce CEO sends surprising message on Google's latest tech</strong><!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->Additionally, Schneider mentions that expectations remain high, with particularly strong peer results, especially from Google's latest <strong>gemini 3 launch</strong>Relies heavily on Broadcom-designed TPU.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->It's notable that after its gain, Broadcom stock now trades at 28 times forward sales and 55 times forward cash flow.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->Still, Goldman sees Broadcom less as a beneficiary of the AI hype and more as one of the few businesses building the hardware foundation on which everything else depends.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->Broadcom is expecting another strong performance in the fourth quarter with Mister Market leading the fast-growing AI semiconductor business.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->Consensus estimates project earnings of about $1.87 per share <strong>Sales of $17.0-$17.4 billion</strong>,<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->Broadcom's own <strong>$17.4 billion</strong> The guide sits near the top of that range. Naturally, the tech giant's AI chip segment is its most important catalyst, which is expected to take a hit <strong>$6.2 billion</strong> In Q4, up <strong>66% year on year, while </strong>Accounting for more than a third of total sales.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START --><strong>RELATED: Billionaire Steve Cohen Takes Over Top AI Stocks, Calming Bubble Fears</strong><!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->It is also expected to add infrastructure software led by VMware <strong>$6.7 billion</strong>growing spectacularly <strong>15%</strong>,<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->Additionally, with a <strong>Record backlog of $110 billion</strong>With a recently revealed “fourth major AI customer” placing orders worth more than $10 billion, investors are looking for strength over the next year.<!-- HTML_TAG_END --></p> </div><div style="display: none" data-testid="read-more"> <p class="yf-1090901"><!-- HTML_TAG_START -->Broadcom's AI story is about how it quietly built the engineering backbone for businesses and effectively defined the AI race.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->At its core are Google and OpenAI, two hyperscalers for which Broadcom is the preferred ASIC design partner in developing custom AI accelerators, known as <strong>xpu</strong>,<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->For perspective, these powerful new chips are incredible now <strong>65% of the company's sales are AI-driven</strong>,<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START --><strong>More AI Stocks:</strong><!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->Google is a big part of this expansion.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->Along with this, new Tensor Processing Unit (TPU) is being commissioned to provide new power. <strong>Gemini</strong> model, Broadcom is the silicon partner behind the design and production of those chips.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->According to a Reuters report, given Broadcom's role as the leading TPU contractor, the meta platform may adopt Google's TPU design in 2026-27, adding a new tailwind.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->OpenAI adds a second catalyst.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->The company is reportedly working with Broadcom on a high-performance custom accelerator, to which OpenAI will become a key contributor, starting in FY26.<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START -->However, investors are still not fully appreciating what Broadcom's future depends on <strong>Google and OpenAI are promoting custom silicon</strong>If both grow faster than expected, Broadcom could quietly take AI share from Nvidia in a big way,<!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START --><strong>Related: Top Analyst Drops Surprise Price Target on Eli Lilly Stock</strong><!-- HTML_TAG_END --></p> <p class="yf-1090901"><!-- HTML_TAG_START --><i>This story was originally published by TheStreet on November 27, 2025, where it first appeared in the Investing section. Add TheStreet as a preferred source by clicking here.</i><!-- HTML_TAG_END --></p> </div>
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