Investing.com — Citi raised its price target on Broadcom to $500 per share in a note on Tuesday, reiterating a Buy rating on the chipmaker and calling it its top semiconductor pick for 2026, ahead of the company’s fiscal second-quarter earnings due June 3.
The bank said it models Broadcom’s April-quarter and July-quarter sales and earnings per share modestly above consensus, driven by stronger artificial intelligence demand.
Citi estimates AI revenue will grow from roughly 49% of total sales currently to approximately 81% by fiscal fourth-quarter 2028, with combined Google and Anthropic AI sales projected to reach around $80 billion and total AI sales hitting $115 billion in 2027, rising to $180 billion in 2028.
The revised $500 price target is based on a 20 times multiple applied to Citi’s fiscal 2028 earnings-per-share estimate of $25, rolling forward from the prior fiscal 2027 base to reflect what the bank described as “increased earnings visibility.”
Citi noted that Broadcom currently serves major AI customers Google, Meta, Anthropic, and OpenAI, plus two unnamed clients, and believes the company is engaged with three additional customers on custom AI chip development.
The bank also pushed back on concerns about Broadcom’s enterprise software business, calling fears “overblown” and describing the segment as “very sticky” given deep integration across large enterprises.
On competitive risk, Citi said a five-year long-term agreement with Google should alleviate concerns about alternative chip development efforts, adding that it would be “difficult for the competition to catch up technologically.”
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