JPMorgan stays bullish on Broadcom stock ahead of earnings
With Broadcom's earnings report imminent, JPMorgan remains firmly bullish on Broadcom stock: the bank says the market has significantly underestimated AI business growth, and concerns that Google's TPU business is slipping away from Broadcom are exaggerated. JPMorgan reiterates an Overweight rating and a $580 price target, framing the upcoming F3Q26 report as a potential catalyst to reprice Broadcom's AI valuation.
Key Takeaways
- JPMorgan projects FY26 AI revenue above $56 billion and FY27 AI revenue above $130 billion.
- The bank maintains a $580 12-month price target, implying roughly 57% upside from a share price near $368.79.
- A five-year Google agreement locks Broadcom in as core TPU mass-production partner through four generations (v8–v11).
- Broadcom shares are up only about 7% year to date, lagging the Philadelphia Semiconductor Index's roughly 69% gain.
- Not all analysts agree: Seeking Alpha warns Broadcom's ~70% custom ASIC share faces rising multi-source competition.
Why is JPMorgan bullish on Broadcom stock before earnings?
In its latest research note, JPMorgan argues that worries about Broadcom's competitive position are overstated while the scale, durability, and growth potential of its AI revenue are underappreciated. The bank's FY26 AI revenue forecast exceeds $56 billion, with FY27 projected above $130 billion — well above management's prior "over $100 billion" framing.
JPMorgan also points to customer diversification beyond Google: Meta's MTIA Iris ASICs scaling, OpenAI's first-generation Jalapeno XPU entering mass production, and custom chip work for Anthropic, ByteDance, and Alibaba. On networking, demand for Tomahawk 5 switching chips continues to outstrip supply, while Tomahawk 6 orders are largely sold out through next year.
Are worries about Google's TPU switch away from Broadcom valid?
Market anxiety has centered on Google bringing in partners such as Marvell, AMD, Alchip, and GUC. JPMorgan's channel checks suggest those additions mainly support Google's internal Co-Optimization Team on chip development and TPU-related custom ASIC work — not a wholesale replacement of Broadcom as core TPU supplier.
The bank highlights a five-year agreement signed in early April under which Google committed to annually increase TPU-related orders from Broadcom and locked Broadcom in as the core mass-production partner for the next four TPU generations. JPMorgan also notes Google's internal team has struggled advancing v8t/Zebra fish projects, underscoring Broadcom's execution track record across a 12-year partnership.
What should investors watch in Broadcom's F3Q26 earnings report?
JPMorgan expects robust July-quarter results, driven by initial mass production of next-generation TPU v8i, sustained TPU v7 strength, Meta MTIA Iris ramp, and Tomahawk 5 demand — plus cyclical recovery in non-AI semiconductors and stable infrastructure software.
Two focal points for the call: whether management offers a more quantified FY27 AI revenue update beyond "over $100 billion," and what commentary it provides on FY28 growth sustainability. JPMorgan anticipates constructive FY28 tone even without formal targets, citing Google TPU v9 2nm mass production in early 2028 and expanding custom-chip pipelines.
Do other analysts share the bullish Broadcom view?
Wall Street sentiment is not unanimous. On CNBC's "Closing Bell," Baker Avenue Wealth Management Chief Strategist King Lip named Broadcom his top pick for the next evolution in custom AI chips, discussing the shift from AI training toward inference and the importance of return on capital expenditure.
Seeking Alpha's Tech Contrarians team takes the opposite stance, arguing Broadcom stock looks "broken" over three quarters and trades in a Nvidia-like bind: dominant in custom ASICs yet pressured as hyperscalers multi-source chips. They maintain that "all roads leading to ASIC" no longer means Broadcom alone, with AVGO shares down 15% since their sell call. For broader context on chip-sector shifts, see our Future Tech & AI Wonders coverage. JPMorgan's full thesis is detailed in its research via Moomoo.