Key Takeaways:
- Broadcom shares have fallen more than 20% from their June highs
- Jefferies and JPMorgan recommend buying the dip, citing AI chip demand
- Wall Street's consensus price target of $511 implies 35% upside
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Broadcom dips 20% from highs as analysts urge buying the pullback
Broadcom shares have slumped more than 20% from their June highs, prompting analysts at Jefferies and JPMorgan to urge clients to buy the dip.
"We view the pullback as a meaningful opportunity," Jefferies analysts wrote in a note Monday, reiterating a buy rating and $550 price target. JPMorgan analysts said they "would be aggressive buyers," with an overweight rating and $580 target.
The sell-off began after Broadcom's Q2 fiscal 2026 report, which showed revenue of $22.2 billion — up 48% from a year earlier — and AI semiconductor revenue jumping 143% to $10.8 billion. Net income climbed 88%. Despite the beat, expectations had run too high, and the stock reversed course. Director Henry Samueli disposed of more than 1 million shares on June 24.
The pullback puts Broadcom at about $378, well below the Visible Alpha consensus of $511 and the 52-week high of $494.18. All nine analysts tracked by Visible Alpha recommend buying, with a mean target suggesting a full recovery to new highs within 12 months.
Broadcom's custom AI chip roadmap remains on track, Jefferies said, dismissing competition fears as overblown. The company's pipeline of new designs should broaden its customer base beyond key clients such as Alphabet. Chief Executive Officer Hock Tan guided third-quarter AI semiconductor revenue to $16 billion, a more than 200% year-over-year increase, and consolidated revenue of $29.4 billion.
The decline tests Broadcom's long-term uptrend after a 40% gain over the past 12 months. Investors will watch the third-quarter earnings report for confirmation that AI chip demand is accelerating as guided.
This article is for informational purposes only and does not constitute investment advice.
