This Analyst Just Upgraded Broadcom Stock. Here's Why.

Broadcom (AVGO) shares are pushing higher on Oct. 27 after senior D.A. Davidson analyst Gil Luria issued a bullish research note on the custom artificial intelligence (AI) chips specialist. Luria upgraded AVGO this morning to “Buy” and raised his price target to $400, indicating potential upside of about 17% from current levels. 

Despite today’s gains, however, Broadcom stock remains down about 30% versus its year-to-date high. 

What Made Luria Upgrade Broadcom Stock?

Luria’s bullish view hinges on confidence that Broadcom’s key AI customers can secure the capital needed to support their spending plans. The analyst believes Anthropic’s initial public offering (IPO) will proceed as planned, and OpenAI will raise fresh capital as it eventually debuts on the stock market, positioning AVGO “to meet its expectations for the next couple of years.”

In short, Luria expects stronger customer funding to ensure that planned chip purchases translate into revenue growth for Broadcom. 

However, at about 16x forward earnings, none of that is baked into AVGO stock, “which creates significant upside if those deals both materialize,” he told investors. 

AI Remains a Tailwind for AVGO Shares

Broadcom recently announced a $63 billion financing structure to support AI equipment leased to Anthropic, with deliveries expected to begin in 2027. That provides another source of support for the spending pipeline.

AVGO’s key role in the ongoing artificial intelligence boom was evident in its fiscal Q3 earnings, with AI semiconductor revenue coming in at $16.7 billion, up a remarkable 221% on a year-over-year basis. 

That said, Barchart currently holds an “88% SELL” average opinion on Broadcom shares, signaling technical momentum is not in their favor for the near term. 

Broadcom Remains Buy-Rated Among Wall Street Firms

Crucially, D.A. Davidon remains one of the more conservative Wall Street firms on Broadcom, with others pointing to significantly more upside heading into 2027. 

According to Barchart, the consensus rating on AVGO shares sits at “Strong Buy” currently, with the mean price target of about $524 indicating potential for a more than 50% rally from here. 

On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.