Broadcom(US:AVGO) First Shanghai Securities·2026-03-10 10:18Company Overview - Broadcom (AVGO) is rated as a "Buy" with a target price of HKD 450.00, reflecting a 36.17% upside from the current price of USD 330.48[5] - The company has a market capitalization of USD 1.6 trillion and has issued 4.741 billion shares[5] Financial Performance - Q1 2026 total revenue reached USD 19.31 billion, a year-on-year increase of 29.5%, slightly above Bloomberg consensus of USD 19.26 billion[7] - Gross margin remained stable at 68.1%, with adjusted EBITDA profit of USD 13.13 billion, up 30.3% year-on-year[7] - Non-GAAP net profit was USD 10.19 billion, a 30.2% increase compared to the previous year, exceeding consensus expectations[7] AI Revenue Growth - AI revenue in Q1 2026 grew by 110% to USD 8.4 billion, with custom chip revenue accounting for 67% and networking revenue for 33%[8] - The company expects AI revenue to reach USD 10.7 billion in the next quarter, representing a 143% year-on-year growth[8] - Broadcom has a backlog of USD 73 billion, with over 50% attributed to AI chip orders, expected to be delivered over the next six quarters[8] Future Projections - Forecasts indicate that AI revenue could reach USD 58.5 billion in FY 2026 and USD 106.2 billion in FY 2027[8] - The company anticipates a compound annual growth rate (CAGR) of 63.0% for net profit over the next three years, projecting net profits of USD 43.2 billion, USD 76.5 billion, and USD 100.2 billion for 2026, 2027, and 2028 respectively[10] Risks - Potential risks include lower-than-expected AI demand growth, challenges in future acquisitions, increased market competition, and macroeconomic policy risks[11]