Broadcom (AVGO) Is 'Firing on All Cylinders'-JPMorgan Sees Major AI Upside

Broadcom Inc. (NASDAQ:AVGO) is one of the AI Stocks Making Waves on Wall Street. On July 9, JPMorgan analyst Harlan Sur reiterated an “Overweight” rating on the stock with a $325.00 price target. The firm said that Broadcom is “firing on all cylinders” following a meeting with Broadcom management.

“Yesterday, we hosted an investor group meeting with Broadcom’s President and CEO, Hock Tan, CFO, Kirsten Spears, and VP of IR, Ji Yoo. The discussions centered around strong AI demand trends, which are driving strong growth in Broadcom’s custom AI XPU business and driving demand for its high performance networking portfolio.”

The firm highlighted its progress on product development, with its 2nm 3.5D AI XPU product tape-out on track for this year. Moreover, its first-generation AI XPU products for two leading prospect engagements, believed to be with Arm/Softbank and OpenAI, are also in the works. There are also some major dollar content capture opportunities in scale-up networking.

JPMorgan said that the company seems to be experiencing a gradual “U” shape recovery in its non-AI semiconductor business. This is reflected in current bookings and order inflection, expected to contribute to positive EPS revisions next year.

Meanwhile, its VMware business is also likely to sustain strong growth until late 2026/2027, possibly attaining $20 billion in annualized revenues. There are gross margin headwinds from the AI XPU business, but semiconductor operating margins are likely to sustain expansion.

Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.

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