JPMorgan Chase reiterated its Overweight rating on Broadcom, maintaining a price target of $580, and raised its FY27 AI revenue forecast to over $130 billion, stating that the market significantly undervalues the growth of its AI business.
JPMorgan Chase, in its latest research report, stated that market concerns about Broadcom's competitive position are significantly overblown, while the scale, sustainability, and growth potential of its AI revenue are underestimated. The bank projects Broadcom's FY27 AI revenue could exceed $130 billion, representing significant upside from management's previous "over $100 billion" framework. The report argues that market concerns about potential share loss in Google's TPU business are inconsistent with reality. The five-year agreement between Google and Broadcom locks Broadcom in as the core mass production partner for the next four generations of TPU products. Furthermore, customer diversification is accelerating, including custom chip projects for Meta, OpenAI, Anthropic, ByteDance, Alibaba, and strong demand for Tomahawk 5/6 switching chips.
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