HSBC Just Flipped Bullish on Broadcom (AVGO)-Here's What Changed

Broadcom Inc. (NASDAQ:AVGO) is one of the 10 Trending AI Stocks on Wall Street Right Now. On June 24, HSBC upgraded the stock to “Buy” from hold with a price target of $400, up from $240. The firm said it is bullish on ASIC, the company’s customer-integrated circuit chips. The stock is an attractive buying opportunity despite its rally this year.

The firm noted how it was previously less bullish on the stock as it was waiting for better visibility into the Application-Specific Integrated Circuit customer pipeline and because of concerns about Apple (AAPL) share loss in the wireless segment.

However, the tables have turned, and the firm is now positive on the stock. This is because it believes the company’s ASIC revenues will significantly beat market expectations from better ASIC project visibility as well as pricing power. The firm further noted how it believes Broadcom’s ASIC revenue potential for FY26-FY27 is still undervalued due to increasing hyperscaler AI server capex allocation toward ASIC projects.

“However, we turn positive on Broadcom as we now believe its ASIC [application-specific integrated Circuit] revenues will significantly beat market expectations from better ASIC project visibility as well as ASP pricing power.”

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

While we acknowledge the potential of AVGO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.