Why Broadcom Providing 2028 Guidance Is a Big Deal for AVGO Stock Bulls

Broadcom (AVGO) has given investors visibility well beyond the next earnings cycle. Following its latest results, the semiconductor and infrastructure software giant raised its artificial intelligence (AI) semiconductor revenue outlook to roughly $115 billion for fiscal 2027 and projected an even more striking $230 billion in fiscal 2028, effectively calling for AI sales to double again.

That long-range guidance matters because it provides Wall Street with a clearer picture of how Broadcom expects today’s AI infrastructure boom to translate into multiyear growth. The company’s Q3 AI semiconductor revenue surged 221% year-over-year (YoY), while management said demand for custom AI accelerators and networking remains exceptionally strong. With major customers including Alphabet (GOOG) (GOOGL), Meta Platforms (META), OpenAI, and Anthropic expanding their AI infrastructure commitments, the 2028 outlook suggests Broadcom believes the current spending cycle has considerably more room to run.

Thus, it remains to be seen whether this unprecedented visibility can translate into earnings growth that justifies the company’s valuation, while several analysts remain constructive despite the stock’s initial post-earnings pullback. Broadcom’s decision to put a $230 billion 2028 AI revenue target on the table could therefore prove far more important than its near-term quarterly guidance.

About Broadcom Stock

Broadcom is a global technology leader that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions, serving markets such as data centers, networking, broadband, wireless, and enterprise software. The company is headquartered in Palo Alto, California, and has increasingly positioned itself at the center of the AI infrastructure buildout through custom silicon and networking solutions. Broadcom has a market cap of around $1.7 trillion, making it one of the largest semiconductor companies globally and a key player in the next generation of computing infrastructure.

AVGO has delivered strong long-term gains, but the stock’s recent performance has been notably less impressive. Shares closed at $368.56 on Sept. 8, leaving the stock up roughly 5% year-to-date (YTD) and 8% over the past 52 weeks.

The longer-term picture remains considerably more bullish. Broadcom has generated an extraordinary 628% price gain over the past five years, underscoring the magnitude of the company’s transformation into a major AI infrastructure and semiconductor beneficiary.

However, the recent weakness is difficult to ignore. AVGO reached a 52-week high of $495 on June 3, leaving it 27% below that peak. The stock has also lost about 15% over the past month.

The latest selloff intensified after Broadcom’s fiscal third-quarter results. Although the topline improved significantly, investors focused on the company’s fiscal fourth-quarter revenue outlook of $34.8 billion, which came in slightly below Wall Street expectations. Shares dropped 2.7% on Sept. 3 before recovering just marginally following the session.

However, the pullback may be less about deterioration in Broadcom’s fundamentals and more about exceptionally high expectations.

AVGO stock is currently trading at a premium compared to industry peers at 34.85 times forward earnings.

Steady Financial Performance

Broadcom delivered a strong fiscal third-quarter 2026 earnings report on Sept. 2, for the quarter ended Aug. 2.

Broadcom’s revenue jumped 86% YoY to $29.6 billion, compared with $16 billion in Q3 FY2025. Semiconductor Solutions was the biggest contributor, with revenue soaring 127% to $20.8 billion, up from $9.2 billion a year earlier. The segment represented 70% of total company revenue. Infrastructure Software revenue increased a more moderate 29% to $8.8 billion, versus $6.8 billion in the prior-year quarter.

The most important number for investors was AI semiconductor revenue, which came in at $16.7 billion, up 221% YoY and 54% sequentially. Management said XPU shipments increased more than 3.5 times YoY, while AI networking revenue more than doubled.

Profitability expanded even faster than sales. Non-GAAP operating income climbed 92% to $20.1 billion, while adjusted net income rose 95% to $16.4 billion from $8.4 billion. That translated into non-GAAP EPS of $3.32, a 96% increase. The adjusted EPS result also exceeded Wall Street expectations.

Cash generation was equally impressive. Cash flow from operations increased 98% to $14.2 billion. Free cash flow rose 95% to $13.7 billion.

For fiscal Q4, Broadcom guided to revenue of $34.8 billion, while it expects non-GAAP operating income to equal 66% of revenue.

More importantly, management expects Q4 AI semiconductor revenue of $21.7 billion, up 236% YoY. That would push full-year fiscal 2026 AI semiconductor revenue to $58 billion, up 186% YoY, above its previous $56 billion outlook.

The company also provided investors with a much more aggressive, longer-term view. Broadcom now expects AI semiconductor revenue to reach approximately $115 billion in fiscal 2027 and $230 billion in calendar 2028, effectively doubling its AI revenue base in consecutive years.

Analysts remain optimistic as they predict EPS to be around $10.25 for fiscal 2026, up 82.1% YoY, and surge by another 70.8% annually to $17.51 in fiscal 2027.

What Do Analysts Expect for AVGO Stock?

Citigroup remains bullish on Broadcom following the company’s latest earnings report. On Sept. 4, Citi maintained a “Buy” rating on AVGO stock and raised the price target to $515 from $500, reflecting increased confidence in Broadcom’s AI growth outlook.

Furthermore, KeyBanc remains bullish on Broadcom. KeyBanc reiterated an “Overweight” rating and a $575 price target for AVGO, emphasizing Broadcom’s decision to raise its fiscal 2027 AI semiconductor revenue outlook to $115 billion.

AVGO stock has a consensus “Strong Buy” rating overall. Among the 42 analysts covering the tech stock, 34 recommend a “Strong Buy,” three give a “Moderate Buy,” and five analysts stay cautious with a “Hold” rating.

While its average price target of $523.62 indicates an upside of 45%, the Street-high target price of $715 suggests that the stock could rally as much as 99%.

On the date of publication, Subhasree Kar did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.