Chip giant Broadcom (AVGO) doesn’t always make the front page when the artificial intelligence (AI) conversation kicks off. Instead, companies like Nvidia (NVDA) tend to dominate the headlines. But Broadcom has quietly and steadily become a key player behind the curtain. As AI reshapes everything from cloud infrastructure to autonomous vehicles, Broadcom’s influence is proving to be anything but background noise.

Now sitting comfortably in the trillion-dollar club, Broadcom’s strength lies in its highly specialized application-specific integrated circuits (ASICs), which power the custom AI chips used by tech leaders like Alphabet (GOOGL) and Meta (META). These ASICs form the backbone of modern data centers, enabling the intense computational workloads required for cutting-edge AI models.

In fact, Broadcom has recently stepped into the spotlight. This time, it's thanks to a bold new Street-high price target of $400 from HSBC, signaling strong conviction in the company’s long-term growth. Could Broadcom actually hit that mark before year-end?

About Broadcom Stock

Based in Palo Alto, California, Broadcom spans semiconductors, enterprise software, and cybersecurity, offering a broad portfolio that supports critical technology infrastructure. Its solutions are found across cloud platforms, data centers, wireless networks, and connected devices, playing a behind-the-scenes role in keeping digital systems up and running.

With a market capitalization hovering around $1.2 trillion, Broadcom has shown impressive strength in 2025, managing to outperform despite broader market choppiness. While the S&P 500 Index ($SPX) has gained a modest 3.5% year-to-date (YTD), AVGO stock has surged with a 14% YTD climb.

The real momentum, however, has come in recent months. Shares have surged 40% over the past three months alone, fueled by rising demand for AI infrastructure and investor optimism. Looking over the past year, Broadcom’s 67% return dwarfs the S&P 500’s 11% gain, highlighting just how sharply the chip giant has broken away from the pack.

Inside Broadcom’s Q2 Earnings Report

In its fiscal 2025 second-quarter earnings report released on June 5, Broadcom delivered a standout performance. The firm posted revenue of $15 billion, narrowly beating estimates of $14.95 billion and marking a strong 20% year-over-year (YOY) increase. The growth was fueled by soaring demand for AI semiconductors, while contributions from VMware added an extra boost to the top line, reinforcing Broadcom’s expanding footprint across both hardware and software.

Broadcom’s semiconductor segment pulled in $8.4 billion in the quarter, up 17% from the same period last year. AI semiconductor revenue alone reached $4.4 billion, marking a sharp 46% YOY increase. Broadcom’s software segment, which includes VMware, also delivered a strong performance with sales climbing 25% YOY to $6.6 billion.

On the profitability front, Broadcom reported adjusted EPS of $1.58, up more than 43% YOY and slightly ahead of the $1.57 per share expected by analysts. Adjusted EBITDA also surged 35% YOY, reaching $10 billion. At the close of the fiscal quarter, Broadcom held $9.47 billion in cash and cash equivalents, ticking up from $9.31 billion in the prior quarter and signaling steady liquidity levels.

While reflecting on the Q2 performance, CEO Hock Tan noted that Broadcom is targeting $5.1 billion in AI chip sales for the third quarter, with strong support from its hyperscale partners who are continuing to invest heavily. Tan also signaled that the company’s AI momentum is expected to carry well into fiscal 2026.

Looking ahead to Q3, the company is guiding for revenue of approximately $15.8 billion, signaling continued strength across both its semiconductor and software segments. On the profitability side, Broadcom projects adjusted EBITDA to be at least 66% of the forecast revenue figure. 

What Do Analysts Think About Broadcom Stock?

Broadcom shares popped nearly 4% on June 24 after HSBC took a bullish stance, upgrading AVGO stock to “Buy” from “Hold” and setting a new price target of $400. The investment firm sees Broadcom as a major beneficiary of rising investment from hyperscalers in custom AI chips, with demand expected to grow over the next few years. HSBC believes Broadcom’s potential in this space is still underappreciated and could drive significant upside as the market shifts toward more advanced, higher-value ASIC projects.

Broadcom continues to enjoy strong backing on Wall Street, with analysts firmly united behind a “Strong Buy” consensus rating. Of the 35 analysts offering recommendations, 31 analysts give it a solid “Strong Buy" rating, one suggests a “Moderate Buy,” and the remaining three advocate for “Hold.” 

AVGO stock’s average analyst price target of $288 indicates only 9% potential upside from current price levels. However, HSBC’s ambitious target of $400 suggests that the stock can rally as much as 51% from here.