Key Takeaways
- Bernstein’s Stacy Rasgon gives Broadcom an “outperform” rating, describing its current price as “absurdly attractive”
- According to Bernstein, AI infrastructure demand “shows no signs of slowing”
- Recent quarterly results showed revenue climbing 16% while profits soared 173%
- Rasgon projects earnings per share exceeding $20 by fiscal 2027, compared to $5.12 over the trailing twelve months
- Cantor Fitzgerald holds an Overweight rating with $525 target; Rosenblatt maintains Buy rating at $500 target
Shares of Broadcom (AVGO) climbed 4.7% during Monday’s trading session following a strong endorsement from Bernstein analyst Stacy Rasgon, who highlighted the semiconductor giant as a prime opportunity in the AI infrastructure space.
Rasgon assigned an “outperform” rating to Broadcom and disclosed that Bernstein maintains a position in the stock within its own investment portfolio. Nvidia (NVDA) received identical praise from the analyst, with shares advancing 1.65% on Monday.
The timing of Rasgon’s bullish call is noteworthy. After reaching a peak of $413 per share on December 10, Broadcom shares had retreated approximately 22% as broader market enthusiasm for artificial intelligence stocks waned.
Rasgon challenged this bearish sentiment directly. “AI demand currently shows no signs of slowing,” he noted, referencing Broadcom’s latest quarterly performance as evidence. The semiconductor company delivered a 16% revenue increase alongside a remarkable 173% surge in profitability.
With AVGO shares currently trading near $321, Rasgon characterizes the current valuation as an attractive entry point. His forecast calls for earnings per share reaching or exceeding $20 in fiscal year 2027, implying the stock trades at approximately 16 times projected forward earnings.
Breaking Down the Projections
That forward earnings multiple becomes particularly compelling when considering Broadcom‘s starting point. Over the past twelve months, the company generated $5.12 in earnings per share. Achieving $20 by 2027 would represent nearly 400% earnings expansion over two years — translating to roughly 100% annual growth.
Based on trailing earnings, the stock currently commands a multiple around 60 times. Rasgon’s thesis is simple: if the anticipated growth materializes, today’s 60x multiple will appear inexpensive in retrospect.
Additional Wall Street analysts share this optimistic perspective. Cantor Fitzgerald reaffirmed its Overweight stance on March 5 with a $525 price objective, following Broadcom’s first-quarter fiscal 2026 earnings release.
Cantor highlighted management commentary indicating networking could comprise up to 40% of overall AI-related revenue. The firm subsequently elevated its earnings estimates, now targeting $23–$25 per share as achievable, up from its previous $20 projection for 2027.
Price Target Consensus Emerges
Rosenblatt Securities also updated its outlook on March 5, raising its price objective to $500 while maintaining a Buy recommendation. The firm referenced CEO Hock Tan’s remarks that fiscal 2027 visibility has “significantly improved.”
Both investment firms emphasized the $100 billion AI chip revenue threshold as a critical benchmark. Cantor projects Broadcom will exceed that milestone in fiscal 2027, forming the foundation for both firms’ positive outlooks.
Cantor named Broadcom among its top recommendations alongside Nvidia, supporting the thesis that artificial intelligence semiconductor demand remains robust despite recent stock price volatility.
Broadcom conducts business through two primary divisions: Semiconductor Solutions and Infrastructure Software.
As of the close of trading, AVGO shares stood at $321.15, representing a gain of $11.29 for the session, with the company’s market capitalization hovering around $1.5 trillion.
