Broadcom has long been seen as a workhorse in the semiconductor industry, quietly building the plumbing of the digital economy—networking chips, connectivity solutions, and infrastructure software—while ceding the limelight to flashier rivals. But UBS’s latest upgrade, which raised its price target on the stock from $290 to $345, marks a turning point. With shares hovering near $298, Broadcom (NASDAQ: AVGO) is being recast as one of the core beneficiaries of the artificial intelligence supercycle, a company whose fundamentals are no longer background noise but front and center for investors awaiting its upcoming earnings report on September 4, 2025.
At the heart of UBS’s bullish call lies Broadcom’s deepening partnership with Google on the TPUv6p chips, custom silicon that drives the training and deployment of the next generation of AI models. These high-performance processors are scaling rapidly, with Broadcom supplying both the design expertise and the production muscle to meet Google’s demands. UBS sees this dynamic pushing Q4 guidance higher, while projecting a 60% year-over-year surge in AI revenue for 2025. That growth would cement Broadcom’s claim to a $60–90 billion custom chip market opportunity and create a durable multi-year trajectory, supported further by the expansion of AI-driven networking demand.
Citi Research shares this enthusiasm, reaffirming its Buy rating with a $315 target. It highlights massive capital expenditures from hyperscalers like Meta, Microsoft, and Alphabet as catalysts for better-than-expected results, projecting AI revenue to climb from $19.5 billion in fiscal 2025 to nearly $27 billion in 2026. Citi’s analysis also underscores Broadcom’s unique advantage: unlike Nvidia, which relies on selling its GPUs into a competitive, highly cyclical market, Broadcom locks in custom silicon contracts with major customers. This insulates it from the volatility of the AI hardware arms race while ensuring it benefits directly from hyperscaler buildouts.
The comparison with Nvidia is instructive. Nvidia commands headlines with eye-popping quarterly numbers, driven by demand for its H100 and upcoming Blackwell GPUs. But Nvidia’s success rests on a single product line, leaving it vulnerable to both competition and overdependence on hyperscale budgets. Broadcom, by contrast, earns steady revenue not only from custom silicon but also from its infrastructure software arm, led by VMware, which delivered $6.6 billion in the last quarter, up 25%. This dual-engine model—semiconductors driven by AI and sticky enterprise software—gives Broadcom an earnings durability its rivals struggle to match.
Marvell Technology provides another point of comparison. Marvell has staked its claim in AI networking and custom accelerators, but its scale is dwarfed by Broadcom’s. While Marvell benefits from growth in cloud data centers, Broadcom enjoys the leverage of both size and long-term contracts, allowing it to capture a larger slice of hyperscaler capital spending. Where Marvell’s growth story is still emerging, Broadcom is already producing quarterly revenue of $15 billion—up 20% year-over-year—with earnings up 44%. AI chip sales surged 46% to $4.4 billion last quarter, expected to reach $5.1 billion this quarter, a trajectory that Marvell has yet to replicate.
As the September 4 earnings report approaches, the market’s attention will turn to whether Broadcom can validate this bullish narrative. With UBS and Citi now openly flagging upside potential, the stock sits at the crossroads of perception and reality. Broadcom is no longer the quiet enabler of digital infrastructure; it is rapidly emerging as one of the most strategically important companies in the AI ecosystem. If the AI boom is still in its opening act, Broadcom’s role as both custom chip architect and software consolidator may make it the most underappreciated winner of them all.