Broadcom (AVGO) stock has gained almost 60% in the past year, at the time of writing, Tuesday morning, March 3, according to Yahoo Finance. Meanwhile, the SPDR S&P 500 index (SPY) is up about 15.52% in the same period.
A semiconductor giant with a vast product portfolio spanning wired infrastructure, wireless communications, enterprise storage, and industrial end markets has not only beaten the S&P 500 but also outpaced all but one Magnificent 7 member.
Magnificent 7 losers in the past year compared to Broadcom:
- Nvidia (NVDA) is up 46%
- Tesla (TSLA) is up 37.66%
- Apple (AAPL) is up 9.46%
- Microsoft (MSFT) is up 0.39%
- Amazon (AMZN) is down 1.83%
- Meta (META) is down 2.19%
The only exception is Alphabet (GOOGL), which is up 80%. The stocks being the biggest winners are thanks to their partnership. Broadcom helped Google build its TPUs. Release of Gemini 3, which was trained on Ironwood TPUs, caused OpenAI to declare “Code Red,” as reported by the Wall Street Journal.
Bank of America believes that Gemini will remain the best model until AI models that were majority trained on Nvidia Blackwell chips are released.
Broadcom will release its Q1 fiscal year 2026 earnings report on March 4. I have covered Q4 results in my article “Bank of America resets Broadcom stock price target.”
Outlook for the Q1 fiscal year 2026:
- Revenue of approximately $19.1 billion
- Adjusted EBITDA of 67% of projected revenue
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RBC Capital Markets lowers Broadcom price target
Srini Pajjuri, Managing Director and Senior Equity Analyst at RBC Capital Markets, updated his opinion on Broadcom stock outlook ahead of earnings in a research note.
The analyst said he expects revenue and non-GAAP EPS of $19.1 billion/ $2.00 for Q1, and $20.4 billion/ $2.16 for Q2, respectively, adding that the Q1 results and outlook should be slightly above consensus, driven by Networking strength. He noted that Anthropic’s planned procurement of up to 1 million TPUs resulted in $21 billion rack orders for Broadcom, which are scheduled to ramp in the second half of 2026.
Related: Bank of America resets Nvidia price target after earnings
Pajjuri wrote: “While 2026 is likely shaping up to be strong, the sustainability of Anthropic TPU rack demand beyond the initial $21b order remains less clear to us, especially given Anthropic’s agreement with NVDA/MSFT to procure $30b of Azure compute.”
In a research note shared with me, Pajjuri reiterated sector perform rating for Broadcom stock and lowered the price target to $340 from $370, due to recent peer multiple contraction. The price target is based on a 25 multiple of his EPS 2027 estimate.
Pajjuri noted risks to rating and price target:
- Cloud capex spending cuts
- Substantial market share loss from competitors
- Supply chain bottlenecks
Broadcom Ships 3.5D SoC
Broadcom has begun shipping the industry’s first 2nm custom compute system-on-a-chip built on its 3.5D eXtreme Dimension System-in-Package (XDSiP) platform. 3.5D XDSiP is a modular, multi-dimensional stacked die platform that combines 2.5D techniques and three-dimensional integrated circuit integration using face-to-face (F2F) technology.
For those interested in the intricacies of the advantages of F2F, I recommend reading the research paper published in the IEEE Xplore Journal.
In a nutshell, the XDSiP platform allows compute, memory, and network I/O to scale independently in a compact form factor.
According to the company, with 3.5D XDSiP, consumer AI customers can deliver the most advanced XPU with unparalleled signal density, superior power efficiency, and low latency to meet the massive computational demands of gigawatt-scale AI clusters.
Related: Bank of America resets AMD stock forecast on deal with Meta
Frank Ostojic, senior vice president and general manager of Broadcom’s ASIC Products Division, noted that the 3.5D XDSiP platform technology was introduced in 2024, but has been improved to support XPUs for a broader customer base, which will ship in the second half of 2026.
More Tech Stocks:
- Morgan Stanley sets jaw-dropping Micron price target after event
- Nvidia’s China chip problem isn’t what most investors think
- Quantum Computing makes $110 million move nobody saw coming
Naoki Shinjo, SVP, Head of Advanced Technology Development Unit, Fujitsu, stated: “This breakthrough is a key enabler for Fujitsu’s FUJITSU-MONAKA initiative to deliver cutting-edge, high-performance, and low-power processors. We highly value our strategic partnership with Broadcom and believe this technology will help power a more scalable and sustainable AI-driven society.”
