Key Takeaways
- Broadcom’s fiscal Q3 FY26 earnings release is scheduled for September 2, with analysts projecting EPS of $3.22, representing a 90.5% year-over-year increase.
- Benchmark’s Cody Acree maintains a Buy rating on AVGO with a price target of $545.
- Year-to-date, AVGO has climbed only 7% and currently trades at the lower range compared to other AI semiconductor stocks.
- Cathie Wood’s ARK Invest purchased 55,131 shares of AVGO on August 28, valued at more than $20 million.
- Consensus among Wall Street analysts is Strong Buy for AVGO, with a mean price target of $512.36, suggesting 39% potential upside.
As Broadcom prepares to unveil its fiscal third-quarter FY26 financial results on September 2, Wall Street analysts are expressing considerable optimism about the semiconductor giant’s performance.
Broadcom Inc., AVGO
Shares of AVGO are currently changing hands at $368.62, reflecting a modest 7% gain since the beginning of the year. This follows a challenging period that saw the stock tumble 13% after delivering second-quarter FY26 results. While those figures were objectively solid, they fell short of the lofty AI-driven expectations that investors had developed.
Ahead of the upcoming earnings announcement, Benchmark’s Cody Acree has reaffirmed his Buy recommendation on AVGO while maintaining his $545 price objective. According to Acree, the recent stock decline has created an attractive opportunity for new investors to establish positions.
Acree holds the No. 63 position among over 12,499 analysts tracked by TipRanks, boasting a 68% accuracy rate and delivering an impressive average return of 33.40% per recommendation across a one-year timeframe.
Earnings Expectations and Projections
The consensus among Wall Street analysts calls for fiscal Q3 FY26 earnings per share of $3.22, marking a substantial 90.5% increase compared to the prior-year quarter. Revenue projections stand at $29.24 billion, representing an 83.3% surge year-over-year.
Acree’s own estimates run slightly above the Street consensus. He’s forecasting Q3 revenue of $29.403 billion alongside EPS of $3.24.
Looking toward Q4 FY26 guidance, Acree anticipates Broadcom will guide for revenue of $34.902 billion with EPS reaching $3.89. His analysis suggests that investors will place greater emphasis on the forward-looking Q4 guidance rather than any minor variations in the Q3 actual results.
Regarding AI chip shipments, Acree highlighted management’s expectations for approximately 10 gigawatts of FY27 deliveries, with the 2026-27 timeframe already locked in and strategic planning now extending into the 2028-29 period.
While Google continues to be the dominant volume customer for Broadcom’s custom XPU solutions, Acree identified Anthropic, OpenAI, and Meta Platforms as emerging demand drivers. Additionally, two other customers are reportedly joining the pipeline.
Competitive Landscape Analysis
Acree acknowledged certain competitive headwinds on the horizon. MediaTek is positioned to serve as a secondary supplier in select programs, while Marvell has introduced new inference and TPU-related offerings that could potentially challenge AVGO’s market position.
Despite these developments, Acree doesn’t consider either competitor a meaningful short-term risk to Broadcom’s core high-performance TPU partnerships. He emphasized Broadcom’s April partnership extension with Google, which secures multiple future TPU generations and AI networking capabilities extending through 2031, as a critical foundation for sustained growth.
Google’s strategy to broaden its chip supplier base was characterized as representing a “share-of-growth” concern rather than an immediate threat to AVGO’s established TPU revenue streams.
From an institutional investment perspective, ARK Invest acquired 55,131 shares of AVGO on August 28, representing an investment of approximately $20.48 million. This purchase came on the heels of a comparable transaction earlier that same week, occurring simultaneously as ARK was divesting its AMD holdings.
The Strong Buy consensus rating from Wall Street analysts on AVGO corresponds with an average price target of $512.36, implying approximately 39% upside potential from current trading levels.
The post Broadcom (AVGO) Stock Gains Momentum as ARK Invest Loads Up Ahead of Q3 Earnings appeared first on Blockonomi.
Be the first to comment