Broadcom (AVGO) just delivered one of its strongest quarters ever, yet the stock slipped, and at least one Wall Street firm trimmed its price target.
That mix of good news and caution is what investors are weighing right now.
Broadcom designs custom chips and networking gear that power the data centers behind today’s biggest artificial intelligence systems.
It also sells infrastructure software after buying VMware.
The company makes most of its money selling semiconductors to giant cloud customers and charging recurring fees for that software.
Why Truist trimmed its Broadcom price target after earnings
Truist Securities lowered its 12-month target on Broadcom to $520 from $550 on September 3, 2026, while keeping its Buy rating, Investing.com reported.
Analyst William Stein called the results good, though not spotless. Two things bothered him:
- The forward guidance. Broadcom guided fourth-quarter revenue to about $34.8 billion, just under the high end of what Wall Street wanted, according to CNBC.
- A small software miss. The infrastructure software unit landed slightly below expectations, which pushed sentiment lower.
Stein also cut his fiscal 2027 earnings estimate slightly, to $21.12 per share from $22.35.
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What Broadcom actually reported in fiscal Q3
The fiscal third-quarter numbers, reported September 2, were huge.
Revenue rose 86% from a year earlier to $29.6 billion, and adjusted earnings hit $3.32 a share, beating expectations of $3.25, Broadcom confirmed.
AI semiconductor revenue grew 221% year over year, the fastest-growing part of the business.
The quarter beat expectations. However, the market wanted next quarter’s guidance to be bigger.
The AI targets that still support the bull case
Broadcom raised its long-term AI outlook.
CEO Hock Tan said the company expects AI revenue to roughly double to about $115 billion in fiscal 2027, then double again to $230 billion in fiscal 2028, Investing.com reported.
Tan said Broadcom has already secured supply to meet those figures, with demand from Google, Anthropic, OpenAI, and Meta.
At $520, Truist’s reduced target still sits roughly 45% above Broadcom’s recent price near $357, so the firm sees the pullback as a valuation reset rather than a broken business.
What could still hold Broadcom back
The growth path depends on things outside a chip designer’s control, and Tan flagged some constraints.
Data-center construction, power availability, advanced wafers, substrates, and high-bandwidth memory supply could all slow how quickly customers can deploy the chips.
More AI Chip Stocks:
- Top analyst resets AMD stock price target for rest of 2026
- 5-star analyst sets jaw-dropping Micron stock price target for 2026
- Citi renews Nvidia stock forecast ahead of earnings
If any of those tighten, the 2027 and 2028 targets get harder to hit on schedule.
There is also a concentration risk, since a handful of AI labs drive much of the demand.
Where Wall Street stands on Broadcom stock now
Truist is not the only one that moved its target, and the reactions were split.
TD Cowen cut its target to $475, while Citi raised its target to $515 and Cantor Fitzgerald pushed to $600.
Across 29 analysts, Broadcom holds a consensus Strong Buy rating with an average target of about $521.41.
What investors can take from the Broadcom reaction
Broadcom shares have lagged the wider chip sector this year, rising only about 6% in 2026, while the group climbed far more.
That’s why the bar heading into earnings was already high.
A few things worth watching before deciding:
- Whether AI orders from Google, OpenAI, and Meta maintain their pace
- Whether supply and power bottlenecks relax into 2027
- How much software revenue recovers next quarter
If those trends stay firm, a lower target after a record quarter may prove to be a short-term dip rather than a warning.
The custom-chip demand driving Broadcom has not faded. The market just wanted more of it, faster.
Related: Nvidia just sent a strong signal to AMD and Intel investors
