Broadcom Shares Surge as Analysts Revise Targets Ahead of Earnings

Broadcom US11135F1012

Investor attention is fixed on semiconductor leader Broadcom as it approaches its fourth-quarter earnings release this Thursday. The period leading up to the report has been marked by a wave of analyst upgrades and speculation regarding a potential landmark deal, fueling significant market anticipation. The central question for shareholders is whether the company's artificial intelligence narrative and expanding partnerships can justify its elevated valuation.

Beyond the upcoming financial figures, strategic developments are providing substantial momentum. Recent media reports indicate Microsoft is in discussions to shift the development of its custom chips from Marvell Technology to Broadcom. Such a move would solidify Broadcom's position as a critical supplier for the Microsoft Azure cloud platform.

Concurrently, the company's technological collaboration with Google is bearing fruit. Google's Gemini 3 AI model was trained entirely on Tensor Processing Units (TPUs) co-developed with Broadcom. Furthermore, the partnership announced in October with OpenAI to develop next-generation AI infrastructure continues to bolster long-term investor confidence in Broadcom's strategic direction.

A Barrage of Analyst Upgrades

In the immediate run-up to the earnings call, several major financial institutions have raised their assessments and price targets. The consensus view is overwhelmingly positive, with 23 out of 25 covering analysts currently recommending a "Buy" on the stock. The upgrades are largely predicated on sustained growth in AI-related semiconductors.

• Morgan Stanley explicitly cited the growth potential in AI chips for its target increase, projecting that Broadcom's growth in this segment could potentially surpass that of Nvidia by 2026.
• Both UBS and Bank of America reaffirmed their Buy ratings while issuing significantly higher price objectives.

High Stakes for the Quarterly Report

The focal point is December 11, when CEO Hock Tan will present results for the fiscal fourth quarter and full year after the market closes. Wall Street's expectations are high: the consensus forecast anticipates a 32 percent year-over-year increase in earnings per share. Revenue is projected to grow by 24 percent to $17.5 billion.

Market nerves are evident in the options market, where traders are pricing in significant potential price swings following the announcement. The share price itself has remained resilient, currently trading at €340.10 and hovering near its 52-week high. Year-to-date, the stock has gained more than 50 percent.

Key Metrics Under Scrutiny

When management addresses the press, investors will be keenly focused on several critical data points:

• AI Revenue Growth: This segment expanded by 63 percent in the third quarter. The market will watch to see if this remarkable pace can be maintained.
• The 2026 Outlook: Analysts, including those at Morningstar, believe a doubling of AI revenue to $40 billion by fiscal 2026 is a plausible scenario.
• Order Backlog: The company recently reported a $10 billion backlog for AI systems.

The future trajectory of the share price will likely hinge on whether Broadcom can provide concrete details to support the optimistic 2026 forecasts. Should management confirm reports of new major customer engagements and raise guidance for the AI segment, it could provide the necessary catalyst for the stock to decisively break through its 52-week high of €347.95.