Broadcom Inc. (NASDAQ:AVGO) stock is back in focus on Wednesday as Wall Street heavyweights recalibrate their outlooks on the semiconductor powerhouse. While the company faces a tug-of-war between its high-growth AI division and a cooling software landscape, institutional sentiment remains largely constructive.
UBS Reaffirms Buy Rating
UBS recently reaffirmed its Buy rating and $475 price forecast for Broadcom, though analysts acknowledged that broader software-sector multiple compression has acted as a drag on the stock. Despite this, the firm maintains that Broadcom's premium semiconductor valuation is justified by durable growth.
A key point of caution remains the integration of VMware; UBS warned that VMware customer churn could rise in 2026 and 2027 as three-year contracts renew, presenting a potential medium-term hurdle for the enterprise segment.
AI Data-Center Tailwinds
In contrast to software concerns, the AI narrative continues to strengthen. Bank of America Securities analyst Vivek Arya recently upgraded his 2030 total addressable market estimate for AI data-center systems to $1.4 trillion, up from $1.2 trillion.
Arya projects that AI systems will expand 100% in 2026 as new deployments ramp up. Notably, he expects chip vendors to pass higher memory costs to customers, a move designed to shield margins against rising component expenses.
Reflecting this optimism, Arya raised Broadcom's fiscal 2026 revenue estimates by 5% and EPS projections by 4%. This bullishness is echoed by Ark Invest; Cathie Wood's firm recently acquired 24,205 shares across its ARKK and ARKQ ETFs, an investment valued at approximately $8 million.
AVGO Price Action: Broadcom shares were up 1.17% at $329.30 at the time of publication on Wednesday, according to Benzinga Pro data.
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