Broadcom (AVGO) shares slipped a bit in premarket trading Tuesday, but the dip looks more like a case of broader market jitters than anything company-specific. With earnings due on June 3, Wall Street is still firmly in the bullish camp, and a few analysts just raised their price targets.
Analysts expect Broadcom to report fiscal second-quarter earnings of $2.32 per share, up from $1.58 a year earlier, on revenue of $22.08 billion compared with $15 billion in the prior-year period. That's a lot of growth, and it's mostly driven by the company's push into artificial intelligence.
UBS Revises AI Revenue Forecasts
On Monday, UBS raised its Broadcom price target to $490 from $475 while keeping a Buy rating. But the bank also made some interesting adjustments to its AI revenue estimates. It lowered its 2026 Anthropic-related revenue forecast to about $8 billion from $21 billion after the deal shifted from full AI rack deployments to a more traditional ASIC structure.
That sounds like a big cut, but analysts said the revised structure could actually improve profitability because the new arrangement carries higher margins despite lower revenue volume. UBS also reduced its fiscal 2027 AI revenue forecast to $133 billion from $145 billion and trimmed its 2027 EPS estimate to $21.14.
LSEG Partnership Expands VMware Cloud Deployment
Separately, LSEG and Broadcom renewed their technology partnership through a new five-year agreement centered on VMware Cloud Foundation. The deal expands LSEG's use of VMware Cloud Foundation as part of its multi-cloud strategy and includes Broadcom professional services to deploy VMware Cloud Foundation 9 across LSEG environments.
The companies said the platform will improve resilience, security and operational efficiency for LSEG's regulated infrastructure while supporting future automation and workload growth. It's a nice reminder that Broadcom's enterprise business isn't just about chips—it's also about the software and services that make data centers run.
Analyst Consensus & Recent Actions
The stock carries a Buy rating with an average price target of $479.86. Recent analyst moves include:
- UBS: Buy (Raised target to $490.00) — May 18
- TD Cowen: Buy (Raised target to $500.00) — May 15
- Wells Fargo: Overweight (Raised target to $545.00) — May 14
Wells Fargo's $545 target is the most optimistic of the bunch, suggesting there's still plenty of upside from current levels.
Broadcom Price Action
Broadcom shares were down 1.21% at $415.60 during premarket trading on Tuesday. The early dip looks tied to the broader premarket tone rather than a single stock-specific headline, with traders leaning defensive into the open as growth-heavy indexes lead the downside. With AVGO sitting near recent highs, even a modest futures-driven pullback can translate into quick profit-taking.
Broadcom trades at a price-to-earnings ratio of about 82x, reflecting a premium valuation relative to many semiconductor peers as investors continue to price in strong artificial intelligence-driven growth expectations. That's a high multiple, but if the AI story keeps delivering, it might just be worth it.
