J.P. Morgan Reiterates Buy With $580 Price Target Ahead of Q3 Print
Broadcom is scheduled to release its third-quarter fiscal 2026 results on Wednesday, September 2, after the market closes. J.P. Morgan analyst Harlan Sur reaffirmed his Buy stance on AVGO ahead of the release, maintaining a $580 price target. Sur ranks No. 17 among more than 12,500 analysts tracked by TipRanks, with a 70% success rate and an average return per rating of 42.2%. Sur expects "solid" Q3 FY26 results and better-than-expected fiscal fourth-quarter guidance, with FY26 AI-related revenue projected to exceed $56 billion on the back of a strong second-half ramp of TPU v8i and robust networking demand from Tomahawk 5 and the new Tomahawk 6 102T switching platform. The Buy reiteration was first flagged on August 31 and reinforced in coverage dated September 1.
Consensus Models $3.22 EPS and $29.24 Billion in Revenue
Wall Street is modeling Q3 FY26 adjusted earnings of $3.22 per share, up 90.5% from $1.69 a year earlier, on revenue of $29.24 billion, an 83.3% year-over-year increase. One analyst's published consensus shows revenue at $29.47 billion and EPS at $3.24, broadly in line with Broadcom's own roughly $29.4 billion Q3 sales guide. The company's second quarter delivered revenue of $22.18 billion, up 48%, with adjusted EPS of $2.44 and free cash flow of $10.26 billion. Broadcom expects adjusted EBITDA to equal roughly 68% of revenue.
AI Semiconductor Business Set as the Main Catalyst
Investors are positioning around AI semiconductor revenue, which Broadcom expects to reach approximately $16 billion in Q3, more than 200% year-over-year, after Q2 AI semiconductor revenue climbed 143% to $10.8 billion. Sur also projects additional support from the initial ramp of Meta Platforms' MTIA Iris ASIC and continued strength in TPU v7 sales. BakerAvenue's King Lip singled out AVGO as a leading investment opportunity for customized AI semiconductors and inference workloads.
Options Price In a Sharp Post-Earnings Swing
Options traders are pricing in a move of up to 7% in either direction by the end of the week from Broadcom's recent level near $369, with a swing of that size implying a range from below $343 to about $395. A separate read from the TipRanks Options Traders Tool flagged an implied move of about 8%, above the stock's 6.67% average absolute post-earnings move over the prior four quarters. Mizuho's Jordan Klein is bullish and sees more room for the shares to rise than fall, citing Broadcom's track record of beating expectations and sustained AI demand. AVGO is up roughly 7% year-to-date, lagging the 61% climb in the PHLX Semiconductor Index, after a 25% pullback from June highs.
Google Partnership Concerns and the Next-Forecast Question
Sur attributed the year-to-date underperformance to anxiety over potential market-share erosion at Google and limited visibility into Broadcom's FY27 AI revenue outlook, which management reiterated last quarter at more than $100 billion. He called those worries "overstated," pointing to channel checks over the last 90 days and a five-year partnership signed in early April as evidence Google's recent collaboration with Marvell Technology reflects supplier diversification rather than displacement. UBS analysts said they see "modest" upside to Broadcom's Q3 sales but are "doubtful that this report will sway the overarching debate on the stock," trimming their price target to $470 from $485.
Strong-Buy Consensus Frames the Stakes
Wall Street carries a Strong Buy consensus on AVGO, with 25 Buys and three Holds and an average price target of $511.88, implying roughly 38% upside from recent levels. The next verifiable milestone is Broadcom's Q3 FY26 release on September 2 after the close, where management's commentary on FY27 AI revenue and FY28 momentum will be the focal point.
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