Broadcom’s (AVGO) stock looks virtually unstoppable, having jumped over 66% year-to-date as it moves ever so close to a $2 trillion valuation.
However, with such momentum comes a new kind of pressure.
Goldman Sachs analyst James Schneider just bumped his price target on the stock, doubling down on his buy rating.
He frames Broadcom as perhaps the most important “arms dealer” in the AI boom.
At the same time, he makes it clear that expectations for Q4 remain sky-high. Investors want a strong beat, a raise, along with a healthy fiscal 2026 guide that tops the expected $11 billion+ in AI sales.
Hence, even though Broadcom could be winning the AI hardware race, Schneider’s note underscores the challenge ahead that when a stock runs this hard, even great results can be disappointing.
Goldman lifts Broadcom to $435 and flags Google/OpenAI AI revenue before Q4.Photo by NurPhoto on Getty Images
Schneider bumped Broadcom’s price target from $380 to $435 (14.5% increase), as it heads into Q4 with a setup that’s too strong to ignore.
In the note, he talked about three areas that investors care about the most.
These include the company’s AI revenue guidance for 2026, the sales contribution from Google and OpenAI, and whether it can maintain its lofty margins as its custom XPU business continues to grow at an incredible pace.
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Moreover, Schneider mentions that expectations remain elevated, especially with the strong peer results, particularly from Google’s latest Gemini 3 launch, relying heavily on Broadcom-designed TPUs.
It’s worth mentioning that following its ascent, Broadcom stock now trades over 28-times forward sales and 55-times forward cash flows.
Nevertheless, Goldman sees Broadcom less as a beneficiary of AI hype and more as one of the few businesses building out the hardware foundation on which everyone else relies.
Broadcom heads into Q4 with Mr. Market expecting another rock-solid performance, spearheaded by a fast-growing AI semiconductor business.
Consensus estimates indicate earnings of approximately $1.87 per share on sales of $17.0–$17.4 billion.
Broadcom’s own $17.4 billion guide sits near the top of that range. Naturally, the tech giant’s AI chip segment is its most important catalyst, which is projected to hit $6.2 billion in Q4, up 66% year over year, while accounting for more than a third of total sales.
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Infrastructure software, led by VMware, is also expected to add $6.7 billion, growing at a superb 15%.
Additionally, with a record $110 billion backlog, along with a newly revealed “fourth major AI customer” placing $ 10 billion+ in orders, investors see robustness rolling straight into next year.
Broadcom’s AI story is all about how it’s quietly built the engineering backbone for businesses, effectively defining the AI race.
At its core are Google and OpenAI, two hyperscalers for whom Broadcom is the preferred ASIC design partner in developing custom AI accelerators, known as XPUs.
For perspective, these potent new chips now account for an incredible 65% of the company’s AI-powered sales.
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Google’s a huge part of this expansion.
With it rolling out new Tensor Processing Units (TPUs) in powering new Gemini models, Broadcom is the silicon partner that’s behind the design and production of those chips.
According to a report from Reuters, Meta Platforms may adopt Google’s TPU designs in 2026–27, adding a fresh tailwind, given Broadcom’s role as a leading TPU contractor.
OpenAI adds a second catalyst.
The company is reportedly working with Broadcom on a high-performance custom accelerator, positioning OpenAI to become a critical contributor starting in FY26.
However, investors still aren’t fully appreciating how much of Broadcom’s future depends on Google and OpenAI ramping custom silicon. If both accelerate quicker than expected, Broadcom could quietly take AI share from Nvidia in a big way.
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This story was originally published by TheStreet on Nov 27, 2025, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.
