JPMorgan Says Buy Broadcom (AVGO) Stock. Here’s Why

TLDR

• Broadcom’s AI semiconductor revenue hit $10.8 billion in Q2 fiscal 2026, up 143% year over year
• Management is guiding for $16 billion in Q3 AI semiconductor revenue, more than 200% growth year over year
• Consolidated Q2 revenue rose 48% to a record $22.2 billion, with free cash flow up 60% to $10.3 billion
• AVGO trades at ~68x earnings, a premium to Nvidia’s ~32x, as analysts maintain a Moderate Buy consensus with a $490.13 average price target
• JPMorgan called AVGO an “aggressive buy,” while Mizuho, Oppenheimer, Goldman Sachs, and Citi all raised or maintained bullish targets

Broadcom (AVGO) stock is trading around $411, up 63% over the past 52 weeks, though it dipped roughly 2% last month after Q3 guidance came in slightly below some elevated investor expectations.

Broadcom Inc., AVGO

The stock opened at $411.35 on Monday and has a 52-week range of $244.17 to $495.00. Its market cap sits at roughly $1.96 trillion.

Q2 fiscal 2026 results were the headline driver. Broadcom posted record revenue, record operating profit, and record free cash flow. EPS came in at $2.44, topping the $2.40 consensus estimate.

AI semiconductor revenue was the standout number — $10.8 billion, up 143% from the same quarter a year ago. That growth is being driven by demand for custom accelerators and AI networking hardware.

Total consolidated revenue climbed 48% year over year to $22.2 billion, just ahead of analyst estimates of $22.13 billion. Adjusted EBITDA rose 52% to $15.2 billion, representing a 69% margin.

Free cash flow came in at $10.3 billion, up 60%, despite $231 million in capex. Broadcom’s outsourced manufacturing model keeps capital requirements relatively low.

Q3 Guidance Sets a High Bar

For Q3, management guided for $16 billion in AI semiconductor revenue — more than 200% growth year over year. Consolidated revenue is expected to reach $29.4 billion, up 84%, with a non-GAAP operating margin of 67%.

That guidance is what caused some investors to pull back. The numbers were strong, but some on Wall Street had been expecting even more.

Broadcom is partnering with Google, Anthropic, and OpenAI on custom chip development. As hyperscalers look for alternatives to Nvidia’s GPUs, Broadcom has become a key supplier of custom silicon.

At roughly 68x earnings, AVGO trades at a hefty premium to Nvidia’s ~32x. Analysts generally argue that’s justified because Broadcom’s earnings are seen as still in an earlier growth phase.

Analyst and Institutional Activity

Wall Street has been largely supportive. Mizuho raised its price target from $480 to $530. Oppenheimer lifted its target from $450 to $535. Goldman Sachs set a $525 target. Citi named AVGO a top chip stock on data center demand. JPMorgan told investors to be “aggressive buyers” at current levels.

The consensus across 42 analysts is Moderate Buy, with an average target of $490.13.

On the institutional side, DUTCH ASSET Corp disclosed a new position of 4,768 AVGO shares worth approximately $1.65 million, making it the fund’s 16th-largest holding.

Insider activity has leaned toward selling. Mark David Brazeal sold 4,825 shares on June 17 at an average price of $394.91, reducing his position by 1.76%. In total, insiders sold 59,385 shares valued at about $21.3 million over the past 90 days.

Broadcom also declared a quarterly dividend of $0.65 per share, payable June 30 to holders of record as of June 22.

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