Key Highlights
- Bernstein’s Stacy Rasgon assigns “outperform” rating to Broadcom, describing the current valuation as “absurdly attractive”
- AI infrastructure demand maintains robust momentum, according to Bernstein’s analysis
- Recent quarterly results revealed 16% revenue growth alongside 173% profit expansion
- Analyst projects earnings per share exceeding $20 by fiscal 2027, compared to $5.12 trailing twelve months
- Cantor Fitzgerald reaffirms Overweight stance with $525 target; Rosenblatt establishes $500 price objective
Broadcom (AVGO) shares climbed 4.7% during Monday’s trading session following a positive research report from Bernstein analyst Stacy Rasgon, who highlighted AI infrastructure opportunities and identified Broadcom as a preferred investment.
Rasgon assigned an “outperform” rating to Broadcom while disclosing that Bernstein maintains a position in the stock within its own holdings. The analyst issued a parallel recommendation on Nvidia (NVDA), which advanced 1.65% during the same session.
The timing of this upgrade carries particular significance. Broadcom reached a peak of $413 per share on December 10 of the previous year, subsequently declining approximately 22% as market enthusiasm around artificial intelligence tempered.
Rasgon challenged this cautious sentiment directly. “AI demand currently shows no signs of slowing,” he stated, referencing Broadcom’s latest quarterly performance as evidence. The semiconductor company delivered a 16% increase in revenue combined with a 173% surge in profitability.
With AVGO shares trading near $321, Rasgon views the current pricing as presenting a compelling entry point. His financial model anticipates earnings per share reaching $20 or higher for fiscal year 2027, which would place the stock at approximately 16 times projected earnings based on today’s valuation.
Breaking Down the Projections
This forward earnings multiple becomes particularly noteworthy when examining Broadcom‘s recent performance baseline. The organization generated $5.12 per share during the trailing twelve-month period. Achieving the $20 mark by 2027 would translate to roughly 400% earnings expansion over two years — averaging around 100% annual growth.
Measured against trailing earnings, the stock currently commands approximately 60 times earnings. Rasgon’s thesis centers on a simple premise: should the anticipated growth materialize, today’s 60x multiple will appear favorable in retrospect.
Additional Wall Street research firms have expressed comparable optimism. On March 5, Cantor Fitzgerald reaffirmed its Overweight rating while maintaining a $525 price objective, released alongside Broadcom’s Q1 2026 earnings announcement.
Cantor highlighted executive commentary indicating that networking infrastructure might represent as much as 40% of overall AI-related revenues. The firm subsequently elevated its earnings estimates, now projecting $23–$25 per share as attainable, revised upward from its earlier $20 forecast for 2027.
Wall Street Consensus Builds
Rosenblatt similarly published updated guidance on March 5, raising its price target to $500 while preserving its Buy recommendation. The firm referenced CEO Hock Tan’s statements that fiscal year 2027 outlook has “significantly improved.”
Both research houses emphasized the $100 billion AI chip revenue threshold as a critical benchmark. Cantor anticipates Broadcom will eclipse that figure during FY27, forming the foundation for both firms’ constructive positions.
Cantor designated Broadcom as a premier selection alongside Nvidia, strengthening the perspective that AI semiconductor demand continues despite recent equity market softness.
Broadcom conducts operations through two primary divisions: Semiconductor Solutions and Infrastructure Software.
At the time of publication, AVGO shares traded at $321.15, reflecting a $11.29 gain for the session, with a market capitalization approaching $1.5 trillion.
