Broadcom Inc. (AVGO) is in the spotlight ahead of its June 3 earnings report, as investors digest a new partnership aimed at solving AI chip packaging bottlenecks and updated Wall Street forecasts that paint a nuanced picture of AI-driven growth.

Broadcom Joins Applied Materials in AI Chip Packaging Push

On Wednesday, Applied Materials Inc. (AMAT) named Broadcom an EPIC Innovation Partner to jointly develop advanced packaging technologies for next-generation AI chips and systems. The collaboration combines Applied Materials' materials engineering expertise with Broadcom's semiconductor and system-design capabilities to accelerate AI product deployment and improve time-to-market.

Under the EPIC platform, Broadcom will tap into Applied Materials' global research network, including the new EPIC Center in Silicon Valley, to tackle growing AI hardware bottlenecks tied to connecting multiple chips within high-performance computing systems.

AI Infrastructure Growth Remains Central

Broadcom has become one of the largest semiconductor and infrastructure software companies, with custom AI accelerators emerging as a major growth driver. The partnership highlights how advanced packaging is becoming increasingly important as AI systems grow more complex and power-intensive.

Advanced Packaging Emerges as AI Bottleneck

Futurum analyst Brendan Burke noted that advanced packaging has become one of the biggest constraints on AI computing growth as chipmakers push for higher interconnect density, faster data movement, and better thermal management. Broadcom's roadmap for multi-die AI processors and 3D chip stacking increases the need for innovations in power delivery, packaging materials, and chip-to-chip connectivity — areas where Applied Materials specializes.

EPIC Model Could Speed Commercialization

Burke said Applied Materials' EPIC platform gives the company earlier involvement in chip architecture development instead of relying on traditional sequential supply-chain handoffs. The EPIC Center in Silicon Valley is designed to shorten the timeline between research and full-scale production, potentially helping Broadcom accelerate deployment of future AI infrastructure technologies.

Analysts Expect Strong Earnings Growth

Wall Street expects Broadcom to report fiscal second-quarter earnings of $2.32 per share on revenue of $22.08 billion, compared with earnings of $1.58 per share and revenue of $15 billion a year earlier.

UBS Raises Forecast, Cuts AI Revenue Estimates

On Monday, UBS raised its Broadcom price forecast to $490 from $475 while maintaining a Buy rating. However, the bank lowered its 2026 Anthropic-related revenue estimate to about $8 billion from $21 billion after the partnership shifted from full AI rack deployments to a more traditional ASIC model. UBS analysts said the revised structure could improve profitability because the new arrangement carries higher margins despite lower revenue volume. The bank also reduced its fiscal 2027 AI revenue forecast to $133 billion from $145 billion and trimmed its 2027 EPS estimate to $21.14.

Analyst Outlook

The stock carries a Buy rating with an average price forecast of $479.86. Recent analyst moves include:

• UBS: Buy (Raises forecast to $490.00) (May 18)
• TD Cowen: Buy (Raises forecast to $500.00) (May 15)
• Wells Fargo: Overweight (Raises forecast to $545.00) (May 14)

Broadcom Price Action

Broadcom shares were down 0.20% at $416.93 during premarket trading on Thursday, according to market data.