Broadcom Inc. (AVGO) Draws Mixed Analyst Views as AI ASIC Momentum Faces Hyperscaler Risks

Core Viewpoint - Broadcom Inc. is recognized as one of the top AI stocks on Wall Street, with mixed analyst opinions regarding its future performance, particularly in relation to its AI exposure and earnings potential [1][2][5]. Analyst Ratings - Goldman Sachs maintains a "Buy" rating on Broadcom, expressing optimism ahead of the company's earnings report, anticipating a solid quarter driven by AI momentum [1]. - Robert W. Baird also holds a positive outlook, reiterating a "Buy" rating with a price target of $420.00, citing strong AI momentum and earnings potential [2]. Revenue Expectations - Baird highlights that the increasing demand for Broadcom's v7 custom ASICs, which support Google's TPU infrastructure, is expected to significantly boost AI-related revenue [3]. - However, DA Davidson initiated coverage with a "Neutral" recommendation and a price target of $335, suggesting that Broadcom may face challenges as hyperscalers shift towards customized accelerators [4]. Market Dynamics - DA Davidson expresses concerns that some of Broadcom's major customers might internalize more of their silicon stack, which could pressure supplier economics over time [5]. - The firm also notes that while Broadcom has potential in the AI ASIC market, it may not justify a premium valuation compared to market leaders like Nvidia [5].