Bank of America Raises Broadcom Price Target to $530

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On Sunday, June 7, 2026, markets continued to react to Broadcom’s recent earnings report and subsequent selloff, even as Broadcom shares drew renewed attention after a revised outlook from Bank of America.

Broadcom stock closed the June 4 session down 12.59% at $418.91, erasing roughly $280 billion in market value following its Q2 fiscal year 2026 earnings release earlier in the week.

Despite the decline, the stock remains up 21.04% year-to-date, outperforming the broader market. The S&P 500 has gained about 11.02% over the same period.

Strong Earnings, Weak Market Reaction

Broadcom reported Q2 revenue of $22.2 billion, up 48% year over year, while GAAP net income jumped 88% to $9.3 billion. Adjusted EBITDA reached $15.2 billion, representing 69% of revenue.

However, investors reacted negatively to margin pressure and forward guidance, particularly expectations that shifts toward AI-related revenue could temporarily impact profitability.

AI Growth Remains the Key Driver

The company continues to benefit from strong demand across artificial intelligence infrastructure, alongside major partnerships with global tech firms.

CEO Hock Tan stated that margin compression is driven by product mix changes rather than structural weakness, as higher-growth AI revenue expands faster than higher-margin software segments.

Bank of America Raises Price Target

In a research note, Bank of America analyst Vivek Arya raised the firm’s price target on Broadcom to $530 from $450.

The bank now expects:

· EPS of $11.60 in 2026

· EPS of $17.93 in 2027

· EPS of $23.56 in 2028

Analysts also project long-term EPS could exceed $30 by 2030, supported by strong AI-driven growth and expanding semiconductor demand.

Risks Still in Focus

Despite the upgraded outlook, analysts highlighted key risks including semiconductor cycle volatility, customer concentration risk, and competition in AI and networking markets.

Concerns also remain around Broadcom’s exposure to major clients and ongoing integration risks from acquisitions.

Market Sentiment: Strong Results, Cautious Mood

Even with solid earnings growth, investor sentiment remains cautious due to margin pressure and softer forward expectations.

The market response highlights a familiar pattern: strong fundamentals, but heightened sensitivity to future guidance in AI-heavy stocks.