Analysts Raise Broadcom Targets After 14% Post-Earnings Drop

Broadcom reported fiscal second-quarter revenue of $22.2 billion, adjusted earnings of $2.44 per share and AI semiconductor sales of $10.8 billion, a 143% increase from a year earlier. Free cash flow for the quarter exceeded $10 billion. The company guided third-quarter revenue to about $29.4 billion. Broadcom shares fell about 14% in extended trading after the results.

Chief Executive Hock Tan reiterated Broadcom’s long-term target of more than $100 billion in AI-related revenue by 2027. Management did not raise that target and did not announce a new marquee hyperscaler customer after the report.

Several analysts raised price targets following the results. Jefferies analyst Blayne Curtis increased his target to $550 from $500 and maintained a Buy rating. Wells Fargo had earlier raised its target to $545 from $430 in May. Susquehanna analyst Christopher Rolland raised his target to $490 from $450 and kept a positive rating. Most analysts covering the stock rate the shares Buy or higher; there were no Sell ratings in the coverage mix.

Broadcom’s AI product mix, including custom AI accelerators and networking chips, accounted for the increase in AI semiconductor revenue. Free cash flow above $10 billion highlighted the company’s quarter-to-quarter cash generation. The company’s guidance points to additional revenue growth in the near term.

Ben Bajarin, chief executive of Creative Strategies, commented on investor reaction by noting that Broadcom “didn’t raise it.”

The post-earnings share decline followed a period of strong gains into the report and the absence of a new long-term target increase or an announced marquee customer in the earnings release.