Goldman Sachs: Broadcom FY27 AI Revenue Expected to Beat Expectations by 12%, Competition Concerns Overblown

According to TechFlow Research, Goldman Sachs' research report on August 18 noted that ahead of Broadcom (AVGO)'s Q2 earnings release, it maintained a "Buy" rating and a $525 price target, representing 34% upside from the current stock price. Goldman Sachs expects Broadcom's FY2026 AI revenue to be approximately $57 billion, basically in line with consensus; FY2027 AI revenue forecast reaches $133 billion, 12% higher than consensus. FY2027 total revenue is expected to be $186.986 billion, with EPS of $21.40. Goldman Sachs believes that market concerns regarding competition from MediaTek and AMD entering the ASIC custom chip sector have been overly reflected in the stock price; Broadcom's current PE is approximately 38 times, which does not fully account for FY2027 AI revenue potential. Broadcom's barriers in mass production delivery and customer relationships, as well as the volume increase of Tomahawk 6 switch chips driven by data center expansion, are two key drivers ignored by the market. Goldman Sachs suggests focusing on three major topics during the earnings conference call: FY2027 AI revenue guidance, ASIC share changes, and data center deployment readiness.