Broadcom may struggle to top its already ambitious forecast of 60% AI revenue growth next year, but Melius Research analysts say any dip after earnings could be a buying opportunity — calling the company “in rarified air.”
Recent results from Nvidia and Marvell showed just how high Wall Street’s expectations are for AI leaders, with both stocks slipping after results failed to fully match the hype. Broadcom faces a similar challenge: with guidance already pointing to $30 billion in AI revenue next year, investors may be tough to impress. Still, analysts led by Ben Reitzes note the company is “firing on all cylinders” and offers rare leadership in AI beyond Nvidia.
Earnings arrive Thursday, with consensus estimates calling for $15.8 billion in revenue and $1.66 per share in adjusted profit for the third quarter. Analysts expect semiconductor solutions to contribute $9.1 billion of that total.
Broadcom’s biggest customers — Google and Meta — have ramped up spending on custom AI chips, while other major names like Apple, Arm, ByteDance, and Elon Musk’s ventures are reportedly in the pipeline. Analysts also see OpenAI and another hyperscaler joining the customer list soon.
Beyond chips, Broadcom has VMware’s subscription business, Tomahawk 6 networking hardware, and exposure to the best custom-silicon programs. Its networking segment, about a third of total revenue, is expected to benefit as hyperscale data centers demand more AI accelerators and networking chips.
Despite a premium valuation of 37x forward earnings, Melius views Broadcom as a “must-own” AI stock, citing its fabless model, strong customer roster, and ability to serve both performance-hungry and cost-conscious AI workloads.
The firm lifted its two-year price target to $335 from $305 while reaffirming a buy rating — betting Broadcom’s long-term AI leadership will outweigh near-term skepticism.
