According to CNBC, Jefferies just named Broadcom as a top pick with a buy rating and raised its price target to $480 from $415. That represents 32% upside from Monday’s close, driven by accelerating demand from hyperscalers like Google, Meta, and OpenAI. Analyst Blayne Curtis highlighted that Google’s token processing has exploded from 480 trillion per month in April to 1,300 trillion in October. The bank estimates Broadcom could see $60 billion in revenue upside by 2027, with Google driving most of it but Meta and OpenAI adding meaningful volumes. Broadcom shares have already surged 56% this year, but Jefferies believes there’s much more room to run.
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The AI Chip Wars Heat Up
Here’s the thing everyone’s missing: while Nvidia gets all the headlines, Broadcom is quietly building an empire in custom AI chips. Jefferies basically said NVDA remains the leader, but AVGO has greater estimate upside. That’s huge when you think about it. Google has been Broadcom’s main ASIC customer for years, but now we’re seeing Meta and OpenAI jump in too. And the volumes are about to get “much more meaningful” in 2026 and 2027.
What’s really fascinating is how this changes the competitive dynamics. Nvidia can’t possibly own the entire AI infrastructure market forever. Companies like Google and Meta want their own custom silicon to optimize for their specific workloads and reduce dependency. Broadcom becomes the go-to partner for making that happen. It’s a smarter play than trying to compete directly with Nvidia’s general-purpose AI chips.
The Numbers Are Staggering
Let’s talk about that $60 billion revenue upside estimate for 2027. That’s not just pocket change – that’s transformative money. Google’s token usage growth tells the story: 480 trillion to 1,300 trillion in just six months? That’s insane growth. And Curtis thinks there could be even more upside as Anthropic starts using Google’s TPUs too.
But here’s my question: can Broadcom actually execute on this scale? They’ve got the technical chops, sure. But ramping production to meet this kind of demand while maintaining quality? That’s the real challenge. Still, the fact that multiple hyperscalers are betting big on Broadcom’s custom chip capabilities suggests they’ve got something special cooking.
What This Means for Investors
So should you rush out and buy Broadcom tomorrow? Well, the stock’s already up 56% this year, which gives some people pause. But Jefferies is essentially saying we’re still in the early innings of this custom AI chip cycle. The real volume growth doesn’t even hit until 2026-2027.
The risk, of course, is execution and competition. But Broadcom has been in the semiconductor game for decades. They know how to navigate complex supply chains and demanding customers. If they can deliver on even half of this projected upside, today’s price could look cheap in hindsight. Just don’t expect smooth sailing – semiconductor stocks never offer that.
