Broadcom jumps as JPMorgan forecasts 54% upside on AI

Broadcom shares rose 5.17% on Wednesday after JPMorgan reiterated an Overweight rating and a $580 price target, a level the bank said implies roughly 54% upside from recent prices.

JPMorgan analysts Harlan Sur and Mayur Ramdhani wrote they would be buyers following the recent pullback and said they “would be aggressive buyers at current levels,” citing Broadcom’s dominance in advanced chip packaging design, its cadence of new designs, a deep intellectual property portfolio and a strong record of execution. The analysts pointed to Broadcom’s long-standing work with Alphabet’s Google, noting the company helped bring 14 advanced chip designs to market over the past 12 years.

Broadcom’s stock fell about 14% in June after the company’s guidance disappointed investors, a drop that coincided with broader selling in AI-related semiconductor stocks. Despite that decline, the shares are up roughly 13% year to date and about 58% over the past 12 months. The stock trades near 17% below its record closing high of $481.57 set on June 2.

JPMorgan dismissed concerns that Google’s next-generation TPU v9 program has been delayed or canceled, saying Broadcom and Google remain on track to ramp production. The bank also referenced a reported five-year agreement signed in March covering the next four generations of Google’s Tensor Processing Units, which it said provides AI revenue visibility through 2031. JPMorgan estimated Google’s internal chip team is at least 18 months behind Broadcom, limiting near-term competitive risk.

Investor caution followed comments from Broadcom Chief Executive Hock Tan that Google could diversify parts of its supply chain and that future semiconductor growth may weigh on gross margins. Those remarks coincided with recent selling in AI-focused chip stocks.

Broadcom currently designs custom AI chips for six major customers, including Alphabet and OpenAI, and holds a leading position in networking chips used in AI data centers. The company has set an internal target of generating $100 billion in AI chip revenue by 2027.

Technical indicators present a mixed picture. The stock trades about 6% above its 100-day simple moving average of $366.95 and roughly 8% above its 200-day average of $358.91, and a golden cross formed in April. At the same time, shares sit below near-term resistance, trading roughly 6.3% below the 20-day moving average and nearly 5% below the 50-day moving average. The MACD indicator remains below its signal line. Analysts cited resistance near $429.50 and support around $370.50.

Wall Street coverage remains largely positive: 51 of 55 analysts covering Broadcom rate the stock a Buy, and the average price target stands above $500 per share, according to market data.