On June 24 local time, Broadcom’s stock price rose by 3.94% to close at $263.77 per share, setting a new all-time closing high, influenced by HSBC’s significant upgrade of Broadcom’s target price from $240 to $400.
Broadcom, a major American chip manufacturer, primarily provides products for networking, broadband, server storage, wireless communication, and industrial applications. In recent years, amid the AI boom, Broadcom has quickly become a leader in the high-end AI ASIC market, leveraging its strong backend chip design service capabilities to customize AI chips for tech giants.
According to Broadcom’s financial report for the second quarter of the 2025 fiscal year (ending May 4, 2025), the quarterly revenue reached a historic high of $15.004 billion, with AI chip revenue exceeding $4.4 billion. It is expected that AI chip revenue will grow to $5.1 billion in the third quarter. Broadcom CEO Hock Tan also anticipates an increase in the deployment of customized AI chips next year, significantly higher than previously expected.
HSBC analyst Frank Lee noted in a recent research report that Broadcom’s ASIC-related revenue is expected to significantly exceed market expectations, primarily due to increased visibility of ASIC projects and improved pricing power. As a result, HSBC’s outlook on Broadcom has turned optimistic.
Frank Lee believes that the market is underestimating Broadcom’s potential for AI chip revenue growth over the next two years, predicting that the company is likely to secure many new clients in the coming years. “Almost all hyperscale cloud providers want to invest in customized chips, and their capital expenditures are expected to boost the ASIC market.”
Frank Lee is confident that by the 2027 fiscal year, Broadcom is expected to acquire up to seven cloud ASIC clients, compared to only three for Marvell and one for World Semiconductor.
Additionally, Frank Lee expects the overall average selling price (blended ASP) of ASICs to surge by 92% year-on-year in the 2026 fiscal year (ending October 2026) and to grow by another 25% in the 2027 fiscal year, primarily due to increased chip sizes and newer memory technologies, as ASIC specifications gradually approach those of AI GPUs.
Based on these predictions, Frank Lee has upgraded Broadcom’s investment rating from “Hold” to “Buy,” raising the target price from $240 to $400.
Editor: Chip Intelligence – Wandering Sword
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