AVGO
GOOGL
META
New model, bigger appetite
Wells Fargo’s Aaron Rakers took a fresh swing at Broadcom and came back more bullish than before. The firm kept its Overweight rating on AVGO but boosted its price target to $545 from $430, after arguing that investors may still be underestimating how much power hyperscalers need for AI data centers.
The pitch: AI demand is tied to power, not vibes
Here’s the thesis in plain English: instead of trying to size the AI chip market the old-school way, Wells Fargo built a framework that ties semiconductor demand to physical data center power capacity. In that model, Broadcom’s AI revenue looks like it’s running 30% to 40% above prior Wall Street expectations.
That matters because the demand isn’t just coming from one shiny object. Wells Fargo pointed to huge cloud buildouts from:
- Alphabet’s Google TPU program
- Meta’s MTIA push
- other gigawatt-scale AI infrastructure projects
Translation: if the cloud giants keep building monster AI campuses, Broadcom could keep riding the wave like a surfer who somehow found the one perfect line.
Why investors should care
The firm also lifted its fiscal 2027 revenue and EPS estimates by 22% and 19%, and pushed fiscal 2028 revenue and EPS forecasts up by 28% and 23%. That’s not just analyst confetti — it’s a sign that the Street may need to keep ratcheting up its long-term Broadcom math if AI capex stays hot.
Broadcom shares jumped about 5% to around $438 on the call, which is a pretty direct vote of confidence from traders. Big picture: when analysts start modeling AI demand in units of power instead of just chips, the spending story gets a lot bigger — and Broadcom looks like one of the clearest beneficiaries.