UBS reiterated its Buy rating on Broadcom Limited (NASDAQ:AVGO) and held a $475.00 price target, citing what the bank views as accelerating demand for the company's Tensor Processing Unit (TPU) products. UBS' outlook lines up with the broader analyst consensus, which InvestingPro data shows at 1.22 (Buy), with price targets among analysts spanning from $370 to $535.
UBS analyst Timothy Arcuri projects Broadcom will ship more than 5 million TPU units in calendar 2027, up from approximately 3.7 million units expected in 2026. The firm noted that a majority of 2027 shipments will be v7 (Ironwood) models, and that v8ax (Sunfish) is expected to become the predominant shipplet in 2028. Both products are reported to be built on TSMC's N3 process.
On the revenue front, UBS now models Broadcom's AI-related sales at roughly $60 billion for fiscal 2026, a figure the bank says would represent about 200% year-over-year growth. That AI revenue forecast rises to about $106 billion in fiscal 2027 - an 80% increase year-over-year - and then to roughly $150 billion in fiscal 2028. These projections add to the context of Broadcom's recent performance: the company recorded 23.87% revenue growth over the last twelve months, while InvestingPro data indicates analysts expect 53% revenue growth for fiscal 2026.
UBS' customer breakdown assumptions include Google accounting for roughly $30 billion of Broadcom's custom compute revenue this year, climbing to about $56 billion in calendar 2027. UBS expects Anthropic's rack deployments to comprise most of the remaining TPU-related revenue, with a smaller share attributed to Meta.
The bank also expects Broadcom to begin shipping OpenAI's application-specific integrated circuit (ASIC) late this year, with Anthropic's ASIC shipments commencing in the second half of 2027. Those timing assumptions underpin UBS' earnings per share estimates of approximately $12.70 for calendar 2026, $18.00 for 2027, and $22.50 for 2028.
UBS highlighted valuation and margin metrics in support of its stance: Broadcom's current price-to-earnings-to-growth (PEG) ratio sits at about 0.25, while gross profit margins are reported near 77.33%.
InvestingPro is cited as identifying 16 additional investment tips for Broadcom and offering a Pro Research Report containing further analysis of what is characterized as a $1.62 trillion semiconductor company.
Other recent developments
A German court ordered Renault to halt sales of its Megane and Clio models following a patent dispute with Broadcom that concerns ethernet network cable connections.
On the brokerage front, Jefferies reiterated a Buy rating on Broadcom with a $500.00 price target.
Wolfe Research upgraded Broadcom to Outperform, citing anticipated benefits from Google's TPU deployments.
Wells Fargo raised its rating to Overweight and increased its price target to $430.00, pointing to expected catalysts through 2026.
In product news, Broadcom introduced what it described as the industry's first Wi-Fi 8 solution designed for AI-ready enterprise networks, emphasizing enhanced performance and security features aimed at that market.
Takeaway
UBS' reiterated Buy and the raised visibility into TPU shipment volumes and AI revenue underpin a bullish outlook on Broadcom's role in cloud AI infrastructure and networking markets. The firm’s forecasts rely on product roadmaps and large customer relationships, and the company has attracted complementary bullish coverage and price-target increases from several other brokers.
Note: The article reflects the firm-level forecasts and third-party data as presented by UBS and InvestingPro. Where projections and court rulings are cited, they reflect the statements and records noted by those parties.