HSBC Raises Broadcom (AVGO) Price Target on AI ASIC Growth Outlook

Broadcom Inc. (NASDAQ:AVGO) is one of the

14 AI Stocks Making Headlines on Wall Street: Qualcomm, Microsoft, and More.

On June 2, HSBC analyst Frank Lee raised the price target on Broadcom Inc. (NASDAQ:AVGO) to $600.00 (from $450.00) while maintaining a Buy rating. The bullish case for Broadcom is based on its ASIC revenue growth, noting how concerns about losing Google’s business seem largely overdone.

Several major customer wins are anticipated to strengthen the company’s ASIC revenue momentum, particularly from the second half of F2026. Broadcom is set to supply Google’s TPU v7, which will likely carry a higher ASP than v6. Moreover, Meta is also ramping its ASIC, noted HSBC.

Besides these names, Anthropic and OpenAI have also been added by AVGO under a multi-year GW deployment agreements, set to start in FY26 and FY27 respectively.

“Therefore, we expect momentum for ASIC revenue to start materially ramping through 2H FY26 into FY27 and beyond. We believe Broadcom has procured incremental CoWoS capacity from suppliers such as Amkor and ASE – we now estimate 260k wafers in FY26 and 480k wafers in FY27. Hence, we raise our FY26e/FY27e ASIC revenue to USD46.0bn/USD100.2bn, 23%/26% higher than the Street.”

HSBC also addressed some market concerns about the company losing Google’s TPU business in 2028. These concerns have been dismissed considering how both companies have a supply agreement that runs till 2031.

Broadcom is a technology company uniquely positioned for the AI revolution, thanks to its custom chip offerings and networking assets.

While we acknowledge the potential of AVGO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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