TD Cowen Cuts Broadcom Price Target to $405, Cites 65% AI Sales Growth
TD Cowen lowered Broadcom’s price target to $405 from $450 while maintaining a Buy rating, citing rising AI infrastructure investment. Broadcom’s AI chip sales surged 65% to $20 billion in fiscal 2025 (31% of revenue) and are forecast to reach $60 billion–$90 billion by fiscal 2027.
1. Price Target Revision
TD Cowen cut Broadcom’s price target to $405 from $450 while retaining a Buy rating, noting a pullback in share valuations as AI investments rise and positioning it as an entry opportunity.
2. AI Chip Sales Surge
Broadcom’s fiscal 2025 AI chip revenue jumped 65% to $20 billion, representing 31% of total revenue and offsetting slower non-AI semiconductor and software segments.
3. Growth Forecast and Tailwinds
The firm projects AI chip revenues reaching $60 billion–$90 billion annually by fiscal 2027, driven by escalating AI infrastructure demand and higher semiconductor estimates for 2026–2027.
4. Diversification through ASIC and Software
Broadcom’s customized ASICs accelerate AI workloads, and its expansion into infrastructure software via VMware strengthens data center integrations and customer stickiness with combined hardware-software offerings.