Key Stats for Broadcom Stock
- Price change for Broadcom stock in last 6 months: 10%
- $AVGO Stock Price as of Aug. 20: $364
- 52-Week High: $495
- $AVGO Stock Price Target: $528
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What Happened?
Broadcom (AVGO) stock had a rough Wednesday, falling almost 5% after Alphabet said it’s expanding its custom-chip partnership with Marvell Technology.
The move wiped out roughly $87 billion in Broadcom’s market value, while Marvell jumped nearly 10% and added about $17 billion.
Google now has an option to buy up to 58.97 million Marvell shares at $206.58 each, a deal that could bring Marvell up to $120 billion in revenue through 2033 if certain targets are hit.
Still, no one has said Broadcom is losing any of its existing Google business. Morningstar analyst William Kerwin called it a “growing pie” rather than Broadcom getting pushed out, and Broadcom stock already bounced back slightly in premarket trading.
The selloff came just a day after JPMorgan gave Broadcom stock a bullish endorsement.
Analyst Harlan Sur argued that markets are underestimating Broadcom’s edge in AI chips, pointing to its 18-month-plus lead over competitors, its design capabilities, and its long track record with Google, having helped bring 14 of Google’s most advanced chip designs to market over the past 12 years.
JPMorgan expects Broadcom’s AI sales to grow 180% annually.
That growth is already showing up in the numbers.
Broadcom’s most recent quarter delivered record AI chip revenue of $10.8 billion, and management guided for that figure to more than double to $16 billion next quarter.
The company also unveiled a $35 billion AI infrastructure platform backed by Apollo Global Management and Blackstone, aimed at supporting more than 20 gigawatts of computing capacity by 2028, with the first phase dedicated to powering over one gigawatt for Anthropic.
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What the Market Is Telling Us About Broadcom Stock
Wednesday’s drop shows investors are nervous about Google diversifying its chip suppliers, but the bigger picture still looks strong for Broadcom stock.
Analysts remain firmly bullish, with a Strong Buy consensus rating and a price target implying over 45% upside from current levels.
Broadcom’s next earnings report lands September 2, just days after Marvell reports on August 27.
Investors will watch closely for signs that Google’s broader supplier list is cutting into Broadcom’s revenue, rather than just shifting negotiating power.
Until then, with CEO Hock Tan still describing AI chip demand as “insatiable,” most of Wall Street seems to view this week’s pullback in Broadcom stock as a buying opportunity rather than a red flag.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
