Buy the Dip or Wait? Three Scenarios That Could Shape Broadcom Stock Through 2028
Quick Read
AVGO’s AI semiconductor revenue surged 221% YoY to $17B, yet the stock trades near its 52-week low at just 18x forward earnings.
Tan said Broadcom is “on target to exceed $30 in earnings per share in fiscal 2028,” making a $600 share price just 20x earnings.
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Broadcom (NASDAQ:AVGO) is building custom AI chips for the biggest frontier labs, and the business is growing at a pace that is hard to match. Last quarter, AI semiconductor revenue reached $16.70B, +221% YoY, and total revenue rose 85.5% to $29.591B.
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Chief executive Hock Tan said “Demand for our custom AI accelerators and networking continues to be very strong.” The stock is still down 3.6% year to date at $326.08. Can Broadcom hit $600 by 2028?
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What’s Holding Broadcom Back Right Now
Shares traded at $495 when Broadcom reported in June and at $371.27 when it reported in September. Over the past month the stock lost 5.52%, though it recovered 3.15% in the past week. I see three concerns behind the slide.
First, gross margin is guided down to roughly 73% in Q4 from 75% as memory-heavy XPUs take up more of the mix.
Second, revenue depends more and more on a small group of AI customers. Third, funding those customers now leans on structures like the $35 billion first portion of Broadcom’s XPV platform.
Big funds were already pulling back: of 19 tracked filers, 10 cut their stakes in Q2 and only 6 added. A beta of 1.476 means the stock moves harder than the market in both directions.
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Wall Street Sees 62.6% Upside. My Model Says 24.3%
The consensus target of $530.14 implies 62.6% upside. Analyst ratings break down to 7 strong buys, 40 buys, 3 holds, with no sell ratings. My base case targets $405.37, or 24.32% upside, inside a 12-month range that runs from $361.78 to $534.37. My model’s confidence score for that range is high, at 0.9.
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I think analysts have the direction right and the timing early. Sentiment is 94% bullish, yet Broadcom’s size limits how much earnings growth lifts my model, adding a small 0.03. Here is how the three scenarios look for November 2028:
Here’s What It Takes for Broadcom to Reach $600
Climbing to $600 from today’s price of $326.08 would require a gain of 84%. With forward EPS of $18.4365, $600 would imply a forward P/E of 33x. My base case already implies 33x, so measured against that benchmark the bold target calls for zero extra multiple expansion (about 1x less, in fact).
The real gap is between that 33x and the 18x the stock trades at today, and earnings growth is what closes it. Management expects AI semiconductor revenue of about $115 billion in fiscal 2027 and $230 billion in fiscal 2028.
Tan said: “We are very much on target to exceed $30 in earnings per share in fiscal 2028.” At $30 of EPS, $600 works out to just 20x. My model lifts its targets by a factor of 1.146, reflecting a 1.15 valuation premium for technology stocks along with that 94% bullish consensus.
On October 26, four financial institutions announced a $63 Billion Financing Structure to Enable AI Compute Capacity in Partnership with Broadcom. Anthropic is on track to add an incremental 10 gigawatts in 2028, and OpenAI could deploy more than 5 gigawatts.
Tan also said “Our demand actually exceeds this outlook, and we will work to improve supply.” A key risk remains that shortages of power, site readiness, substrates or HBM push those deployments past 2028.
Where Broadcom Trades Today vs Its Earnings Power
At 18x forward earnings, Broadcom looks cheap for a business guiding Q4 revenue up 93% YoY. The stock sits much closer to its 52-week low of $288.95 than to its high of $493.28. Over 10 years, shares have returned 2426.2%.
At this multiple, the market gives little value to the 2028 earnings ramp (and beyond the chip designers themselves, the power, cooling, and networking suppliers feeding the same expansion are worth a look, which is why we rounded up seven of them in a free report).
Is $600 Realistic? Here’s My Take
Getting to $600 takes an 84% gain. It’s a stretch, but it still sits below my 2028 bull target of $654.93. The thesis depends on three things going right: AI revenue has to track toward $115 billion in fiscal 2027, operating margin has to hold near 66% as gross margin falls, and customer financing has to keep buildouts on schedule.
A major customer delaying deployments or shifting toward GPUs would undermine the thesis. Such returns shouldn’t be expected every year, but we’ve outlined the path for how Broadcom could reach $600 in 2028.
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