Broadcom Inc. (NASDAQ: AVGO) is trading just below record highs as investors lean into its role at the center of the AI infrastructure boom and watch nervously ahead of its next earnings report on December 11, 2025. With Wall Street raising price targets into the mid‑$400s, institutional money adding to positions, and AI demand accelerating, AVGO is one of the most closely watched semiconductor names going into year‑end. [1]
At the same time, the stock’s valuation is stretched, VMware integration remains controversial, and several strategists are warning that the AI trade could hit an “air pocket” in 2026. [2]
Key takeaways
- Price & valuation today: AVGO is trading in the high‑$370s to low‑$380s on December 3, 2025, just below last week’s record close near $403. The stock’s 52‑week range is roughly $138–$403, with a market cap around $1.7–1.8 trillion and a trailing P/E near 96x. [3]
- AI engine: AI‑related semiconductor revenue jumped into the $5+ billion per quarter range in 2025, with Broadcom guiding for 66% year‑over‑year AI chip growth in Q4 and highlighting a $110 billion backlog, heavily skewed to AI infrastructure. [4]
- Wall Street targets: Top analysts at Morgan Stanley, UBS and Bank of America now carry price targets of $443, $472 and $460 respectively, all with “Buy” ratings tied to custom AI chip demand. Consensus targets across platforms cluster roughly between $400 and $420 per share. [5]
- Upcoming catalyst: Broadcom is guiding for Q4 FY25 revenue of about $17.4 billion, up roughly 24% year‑on‑year, with AI semiconductors expected to grow 66% and infrastructure software about 15%. Earnings are scheduled for December 11, after the close, and options markets are bracing for a sizable move. [6]
- Risk‑reward balance: Forecasts call for around 30% annual earnings growth and more than 20% revenue growth in coming years, but valuation, hyperscaler concentration, VMware fallout, and a possible cooldown in the broader AI trade are key risks. [7]
Where Broadcom stock stands on December 3, 2025
Real‑time quote services show AVGO trading around the mid‑$370s to low‑$380s on Wednesday, modestly below Tuesday’s close of $381.57. [8]
Over the last week, the stock has:
- Set a new all‑time high: Broadcom hit an intraday peak near $403 and logged a record closing price of $402.96 on November 28. [9]
- Pulled back sharply: On December 1, shares fell about 3–4% to the mid‑$380s amid profit‑taking and worries about stretched expectations. [10]
- Remained elevated: Even after the dip, AVGO is hovering just a few percentage points below its highs and is up on the order of 60%+ year‑to‑date, far outpacing the S&P 500. [11]
Valuation has followed the price higher. Google Finance and other trackers peg Broadcom at:
- Market cap: ~$1.7–1.8 trillion
- Trailing P/E: Around 96x, well above many peers
- 52‑week range:$138.10–$403.00 [12]
Several valuation services note that AVGO trades at a premium not only to the broader U.S. market but also to the semiconductor sector, with some models describing the stock as more than 20% above their estimate of fair value. [13]
The AI supercycle driving Broadcom’s story
Explosive AI semiconductor growth
Broadcom’s re‑rating in 2025 is powered by AI‑heavy numbers rather than just narrative:
- Recent quarters delivered revenue around $15.9 billion, up 22% year‑over‑year, with non‑GAAP EPS beating expectations. [14]
- Within that, AI‑specific semiconductor revenue has surged to roughly $5.2 billion per quarter, growing more than 60% year‑on‑year. [15]
- Management has highlighted a $110 billion order backlog, heavily skewed to AI infrastructure, and a multi‑year cycle in which each of the company’s three main hyperscaler customers could deploy around 1 million custom XPUs by 2027. [16]
Broadcom designs custom accelerators (XPUs/ASICs) and high‑speed Ethernet networking silicon for hyperscale data centers. These chips sit underneath large language models and generative AI workloads at cloud giants such as Alphabet, Meta and others. [17]
The OpenAI and Google TPU angle
Two relationships dominate recent commentary:
- Alphabet (Google) TPUs: Broadcom has been a long‑time design and manufacturing partner for Google’s Tensor Processing Units. Analysts note that Google’s latest Gemini models are trained entirely on TPUs co‑designed with Broadcom, reinforcing Broadcom’s role as a key AI infrastructure supplier. [18]
- OpenAI custom chip deal: Reuters and other outlets reported that OpenAI selected Broadcom to build a first‑generation custom AI processor, in a deal tied to a multi‑billion‑dollar – often cited as $10 billion – AI rack order expected to ramp from 2026. That announcement helped send Broadcom shares up more than 15% on the day. [19]
In a recent deep‑dive, one industry analysis estimated that the AI chip market could approach $700 billion in 2025, leaving room for multiple winners – with Broadcom positioned as a specialist in custom ASICs and AI networking, rather than a direct GPU rival to Nvidia. [20]
VMware integration: tailwind and controversy
Broadcom’s $69 billion acquisition of VMware in 2023 reshaped the company’s mix. By late 2025:
- Infrastructure software (dominated by VMware) accounts for roughly 40–43% of revenue and carries higher margins than the semiconductor segment. [21]
- VMware Cloud Foundation (VCF) 9.0 is positioned as the backbone of modern private cloud deployments, especially for regulated industries and on‑prem AI workloads. [22]
Recent developments include:
- ING private‑cloud deal: Broadcom announced that Dutch banking group ING is adopting VMware Cloud Foundation 9.0 as a strategic private‑cloud platform, underscoring traction with large, sticky financial customers. TS2 Tech
- EUC divestiture: Broadcom has sold VMware’s End‑User Computing (EUC) division as it streamlines the portfolio around core infrastructure and cloud platforms. [23]
But the integration has also drawn criticism and regulatory scrutiny:
- Many European customers face steep VMware price increases – in some cases cited as up to 1,500% – under Broadcom’s new licensing and subscription model, prompting public complaints and calls for antitrust investigations. [24]
- Broadcom’s overhauled partner program has disrupted traditional VMware resellers, opening the door for competitors like Nutanix and Microsoft to win share from disgruntled customers. [25]
For AVGO holders, the VMware story is a double‑edged sword: it boosts high‑margin recurring revenue but creates reputational and regulatory risk if customers and regulators push back too hard.
Fresh analyst calls and price targets as of early December 2025
Analyst activity around Broadcom has been intense in the days leading up to December 3.
Big banks push targets into the mid‑$400s
A widely cited cluster of upgrades includes: [26]
- Morgan Stanley: Joseph Moore raised his AVGO price target from $409 to $443 and reiterated an Overweight/Buy rating, citing strong demand checks across the AI supply chain. He now models ASIC revenue of about $27.2 billion in FY26 and nearly $59.5 billion by FY27, implying that Broadcom’s AI chip growth could outpace Nvidia and AMD in calendar 2026.
- UBS: Lifted its Broadcom target from $415 to $472, maintaining a bullish stance on custom AI chips and networking.
- Bank of America: Analyst Vivek Arya increased his target from $400 to $460, highlighting Broadcom’s role in Google’s TPU roadmap, the OpenAI order, and raising sales forecasts to roughly $63 billion (2025), $88 billion (2026) and $120 billion (2027).
These target hikes have helped keep AVGO in the spotlight even during brief pullbacks.
Consensus view: strong buy, but more modest upside
Analyst aggregators show a broad “buy” skew, but with some divergence on near‑term upside:
- TipRanks: 29 Buys and 2 Holds, for a “Strong Buy” consensus and an average target around $409, roughly mid‑single‑digit upside from recent prices. [27]
- MarketWatch: Around 51 analyst ratings with an average 12‑month price target close to $417 and an overall “Buy” recommendation. [28]
- StockAnalysis: A separate panel of 28 analysts also labels AVGO a “Strong Buy”, but shows an older average target near $362.64, with a wide range from $210 to $472, implying that some forecasts lag the stock’s rapid move higher. [29]
Taken together, the Street’s narrative is clearly bullish on the AI and VMware story, but as the share price has rocketed, implied upside in many 12‑month models has compressed.
Growth forecasts: 2025–2030 outlook
Near‑term: Q4 FY25 and 2026
Heading into the December 11 report, multiple sources converge on similar expectations: [30]
- Q4 revenue guidance: About $17.4 billion, up roughly 24% year‑over‑year.
- Semiconductor revenue: Expected to grow about 30% to $10.7 billion.
- AI semiconductor revenue: Projected to surge roughly 66% to $6.2 billion.
- Infrastructure software revenue: Guided to increase around 15% to $6.7 billion.
- Adjusted EBITDA margin: Management targets about 67% for the quarter.
Independent forecast services such as Simply Wall St project ~30% annual earnings growth and ~21% annual revenue growth over the next few years, with return on equity approaching 48% in three years – well above typical market averages. [31]
Several broker notes and outlets like Investor’s Business Daily highlight that analysts are modeling around 39% profit growth in both 2025 and 2026, cementing AVGO as a leading earnings‑growth story in the AI trade. [32]
Longer‑term scenarios
Longer‑dated projections are necessarily speculative but give a sense of sentiment:
- One Nasdaq analysis modeled a scenario in which global data center spending reaches $3 trillion by 2030 and roughly 39% of that goes to AI‑capable chips. If Broadcom were to capture 20% of that AI chip market, its annual revenue could reach about $234 billion by 2030 – a ~270% increase from current levels. [33]
- Separate forecasting pieces for 2025‑2030 argue that Broadcom, as a major alternative to Nvidia, “should see its stock price grow significantly” as the AI market broadens, though those reports rarely anchor forecasts to specific valuation multiples. [34]
These are not base‑case Wall Street estimates, but they illustrate why some investors talk about AVGO as a potential multi‑year compounder if AI infrastructure spending keeps climbing.
Technical backdrop and institutional positioning
Technical picture: still in an uptrend
Investor’s Business Daily notes that AVGO recently broke out of an early‑stage cup base, ran to fresh highs around $403, and has “re‑entered a buy zone” as it pulls back toward prior breakout levels. [35]
A separate technical‑analysis piece characterizes Broadcom as looking “bullish” thanks to: [36]
- Strong fundamental momentum
- Favorable seasonality
- A constructive chart despite short‑term volatility
Short‑term trading services point out that:
- AVGO has risen in 6 of the last 10 sessions while logging double‑digit percentage gains over the last few weeks.
- The pullback at the start of December came on high volume, signaling some profit‑taking but still within an overall uptrend. TS2 Tech+1
Big money flows: who is buying and selling?
Recent regulatory filings and institutional‑ownership roundups show heavy involvement from large asset managers:
- Invesco Ltd. increased its AVGO stake by 8.4% in Q2, to 38.45 million shares worth roughly $10.6 billion, making Broadcom its sixth‑largest holding. Invesco notes that about 76% of Broadcom’s stock is now owned by institutions overall. [37]
- Sands Capital Management boosted its position by about 29.7% in Q2 to more than 1.84 million shares. [38]
- JT Stratford LLC almost doubled its stake, adding 6,322 shares in Q2. [39]
- On the other side, 1832 Asset Management trimmed its AVGO holdings by roughly 48% in Q2, still leaving a position of about 1.83 million shares worth over $500 million. [40]
The takeaway: while some managers are locking in gains after the stock’s powerful run, many large funds are still increasing exposure, consistent with the “AI infrastructure core holding” narrative.
Key risks investors are watching
Even the most bullish recent notes highlight several important risk factors:
- Valuation and execution risk
With a trailing P/E near 96x and multiple valuation models flagging AVGO as significantly above sector norms, any disappointment in AI growth, hyperscaler capex, or VMware margins could trigger a sharp de‑rating. [41] - Hyperscaler concentration
A large share of Broadcom’s AI revenue is tied to a small cluster of hyperscale customers (Alphabet/Google, a handful of cloud giants, and OpenAI). Analysts at Morgan Stanley and others explicitly call out concentration risk and the possibility that some partners may eventually shift more silicon in‑house or diversify vendors. [42] - Competition in AI chips and networking
Nvidia, AMD, Marvell and others are aggressively pursuing the same AI budgets. Reports note that traders are increasingly “pricing in a big swing in AI chip market share” toward Broadcom from Nvidia, but that shift is far from guaranteed. [43] - VMware customer backlash and regulatory scrutiny
The VMware integration has raised prices sharply for many customers and forced changes to partner models, prompting some enterprises to explore alternatives. European trade bodies and regulators have already taken interest in Broadcom’s post‑acquisition practices, increasing regulatory risk. [44] - Macro and AI‑cycle risk
Bank of America’s broader equity strategy team has warned that an “AI air pocket” – a period where spending and enthusiasm pause – combined with a weakening consumer could weigh on markets in 2026. If AI capex growth slows or investors rotate out of high‑multiple AI names, richly valued stocks like Broadcom could be hit disproportionately hard. [45]
What to watch next: December 11 earnings and beyond
With less than two weeks to go, the December 11 earnings release is the key near‑term catalyst for AVGO:
Analysts and investors will be focused on: [46]
- Q4 AI revenue growth
Does AI semiconductor revenue actually grow around 66% year‑over‑year to roughly $6.2 billion, or has some demand been pulled forward? - Updated AI TAM/SAM and backlog
Any refresh to Broadcom’s addressable market estimates or backlog figures – especially around OpenAI and new hyperscaler wins – could reset expectations for 2026–2027. - Non‑AI semiconductor recovery
Management has described non‑AI chips as flat to slowly recovering. Commentary on timing and magnitude of that rebound will matter for the durability of overall growth. [47] - VMware Cloud Foundation traction
New deals similar to ING’s VCF 9.0 deployment would strengthen the case that Broadcom can turn VMware into a durable, high‑margin software platform despite near‑term friction. TS2 Tech+1 - Guidance for fiscal 2026
Markets will parse any guidance on 2026 AI growth, hyperscaler capex visibility, and VMware profitability. Given the stock’s premium valuation, even solid numbers paired with cautious language could spark volatility.
Bottom line
As of December 3, 2025, Broadcom stands at the intersection of three powerful forces:
- A historic AI infrastructure build‑out
- A controversial but potentially lucrative VMware transformation
- A valuation that already assumes years of strong execution
Current news flow, forecasts and analyses overwhelmingly frame AVGO as a core AI infrastructure winner with substantial top‑ and bottom‑line growth ahead. At the same time, they emphasize that the margin for error is shrinking as the stock hovers near record highs.
For publishers and readers tracking Broadcom through Google News and Discover, the next decisive data point will arrive on December 11. Until then, the stock is likely to trade as a high‑beta barometer for the broader AI trade rather than a typical chip name.
Important: This article is for informational and news purposes only and does not constitute financial advice or a recommendation to buy or sell any security.
References
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