Semiconductor manufacturer Broadcom (AVGO) is schedule to reveal quarterly earnings this week, but HSBC Global Investment Research’s bullish note on AVGO stock this morning is more excited about what’s coming down the pike in 2026’s back half.
Broadcom is set to report results from its fiscal second quarter after the close on Wednesday, June 3, and analysts surveyed by Yahoo! Finance are expecting yet another blowout report:
- Revenues: $22.1 billion (+47% year-over-year)
- Adjusted earnings per share (EPS): $2.40 (+52% YoY)
The estimates come from an overwhelmingly bullish research community. Of the 47 analysts currently covering AVGO stock, 44 call it a Buy, versus just three Holds and no Sells, according to S&P Global Market Intelligence data. Those analysts are looking for robust long-term earnings growth (next three to five years) of 41% annually on average. Their $482 average 12-month price target implies only about 8% upside from here, but that follows a nearly 30% jump in shares year-to-date.
Now, let’s look at what HSBC and other analysts have to say about the company heading into its Q2 earnings.
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HSBC: AI Revenue Ramp Coming in 2026’s Second Half
On Monday morning, Frank Lee, Global Head of Tech Hardware & Semi Research at HSBC, reiterated the firm’s Buy call on Broadcom shares and raised his price target to $600 (34% upside from Friday’s closing price) on the belief that artificial intelligence could lift the firm’s revenues even higher than the Street expects during the second half of the year.
| Broadcom (AVGO): Quick Stats | |
|---|---|
| Market cap | $2.1 trillion |
| Dividend yield | 0.6% |
| Forward price-to-earnings (P/E) | 40.2 |
| Price/earnings-to-growth (PEG) | 0.97 |
| Source: Yahoo! Finance. Data is as of May 30, 2026. | |
“We expect ASIC [application-specific integrated circuits] revenue momentum to pick up meaningfully from 2H FY26 as Broadcom begins supplying Google’s [GOOGL] TPU v7 (likely higher average selling price than v6) and Meta [META] ramps its ASIC,” Lee writes. “Broadcom has also added Anthropic and OpenAI under multi-year GW deployment agreements, with deployments starting in 2H FY26 and FY27, respectively, and expects shipments to customers four and five to more than double in FY27.
“Therefore, we expect momentum for ASIC revenue to start materially ramping through 2H FY26 into FY27 and beyond,” adds Lee, who hiked his ASIC revenue estimates to $46 billion for 2026 and $100.2 billion for 2027. Those numbers are a respective 23% and 26% higher than the Street’s current estimates.
While Lee sees Q2 results coming largely in line with Street expectations, he thinks that the ASIC ramp could influence third-quarter guidance. He’s now looking for revenues of $30.7 billion in the third quarter, which is 7% ahead of consensus estimates of $28.6 billion.
He also sees networking demand as a potential driver of upside surprise.
“In our [Q1] preview note , we highlighted AI networking could be the next re-rating driver given total addressable market expansion as AI clusters get bigger and agentic AI rises,” writes Lee, who also raised his AI networking revenue estimate to $40.2 billion, higher than the consensus $37.3 billion. “Broadcom is the market leader in the ethernet switching market. We expect the transition from 800G to 1.6T switches to be a key driver for revenue growth.”
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Other Analyst Thoughts on AVGO Stock
A Jefferies analyst team says there are “plenty of moving pieces” in Broadcom’s upcoming report but still expects “a modest beat and raise” heading into the report. They’re looking for AVGO’s third-quarter revenue guidance to come in at $29 billion, driven largely by growth in the AI networking business.
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“For April, AVGO guided total revenue of $22B with AI Semiconductor revenue of $10.7 billion,” they write. “As noted, we expect management points to $17 billion in AI revenue tied to a combination of switching (TH6 ramp) and optical as AVGO gains share at 1.6T.” They also believe AI revenues will come in hot for 2027, estimating $124 billion versus management’s prior guidance of $100 billion.
Jefferies currently rates AVGO stock at Buy with a $500 price target (12% upside).
Morgan Stanley analyst Joe Moore sees AI revenues growing from $10.8 billion in Q2 to $16.9 billion in the third quarter. While he “is not convinced this is a major beat-and-raise quarter,” he still sees significant upside potential, expecting Broadcom’s current AI market share of roughly 10% to grow over time.
He’s also expecting $120 billion of AI revenue in 2027 and continues to see “room for upward revisions as ASIC programs ramp and AI networking exceeds expectations.”
Moore has an Overweight (equivalent of Buy) rating on AVGO stock and raised his price target to $485 per share (9% upside).
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