Broadcom Inc. (NASDAQ:AVGO) is making waves again after sealing a major deal with OpenAI that sent its shares soaring 10% on Monday. The fabless chipmaker announced a multiyear “strategic collaboration” to supply AI processors and networking technology for OpenAI’s next generation of data centers. Under the partnership, OpenAI plans to deploy 10 gigawatts of AI accelerators designed with Broadcom, a scale that puts the company in the same league alongside Nvidia and AMD, both of which have inked similar partnerships with the ChatGPT maker. The first wave of Broadcom-powered systems is set to roll out in the second half of 2026, with full deployment expected by the end of 2029.
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That announcement coincided with a bullish new report from Aletheia Capital analyst Stefan Chang, who initiated coverage on AVGO with a Buy rating and a $400 price target. That figure implies 12.5% upside from current levels.
“We expect AVGO’s AI revenue to double YoY in both FY26/27F – effectively quadrupling in three years, reaching $80-85bn in FY27F,” Chang wrote. That projection sits at the upper half of Broadcom’s $60–90 billion total addressable market for AI and reflects how quickly the company’s custom ASICs are gaining traction with hyperscalers and top-tier cloud customers.
Chang believes Broadcom only needs to secure four out of seven key customer prospects to hit those ambitious targets, leaving room for upside. The analyst also highlighted ongoing work to expand CoWoS (Chip-on-Wafer-on-Substrate) packaging supply – a critical bottleneck for AI chip production – and sees this as a near-term catalyst. Looking further out, the analyst expects the scale-up opportunity to pick up steam in the second half of calendar 2026. By then, Broadcom’s free cash flow could triple to $60–65 billion, paving the way for aggressive buybacks, higher dividends, and faster debt reduction.
Meanwhile, KeyBanc’s John Vinh is equally upbeat heading into Broadcom’s fiscal fourth-quarter report in December. The analyst expects “higher results and higher guidance,” driven by unrelenting AI demand across networking and custom AI ASICs. Vinh notes that Broadcom maintains “100% share” of Google’s TPU program through 2026 due to the delayed rollout of TPU7e, while Meta’s MTIA v2 accelerator ramp adds another tailwind. Vinh’s models call for Q4 revenue of $17.5 billion and EPS of $1.87 – slightly ahead of consensus – and he sees the January quarter remaining strong as AI programs scale.
Vinh, who’s ranked among the top 2% of Wall Street analysts, assigns AVGO shares an Overweight (i.e., Buy) rating and a $420 price target, implying an 18% upside from current levels. (To watch Vinh’s track record, click here)
The rest of the Street also has an optimistic view of AVGO. The stock’s Strong Buy status comes from 27 Buys and just 2 Holds issued over the past three months. (See AVGO stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.