Broadcom Company
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Investors tanked Broadcom's (AVGO) market cap by almost 223 billion ($300 billion) in one sweep on Thursday as traders remained bullish.

Thursday's premarket trading saw Broadcom shares drop by over 12 per cent, reflecting investors' sentiment toward Broadcom's decision to keep its fiscal 2027 AI revenue target unadjusted. Arguing that the AI chipmaker's £74.3 billion ($100 billion) sales forecast was conservative at best, stock analysts went the other route and raised their price targets.

'Shares fell... as investors hoped for higher guidance in 2027 and beyond,' Morningstar analysts stated in the Stocktwits report. 'We believe Broadcom is guiding conservatively, and see the $100 billion fiscal 2027 target as a sandbag.'

Traders Dispute Thursday's Share Plunge

Traders remained bullish despite the plunge and predicted an eventual correction. '$AVGO More than 300 billions are gone in market cap in one session. This is unreal. Recovery will be powerful and it could happen by Friday,' one trader wrote.

'Did a deep dive on AVGO earnings. Over reaction imo,' another trader asserted. 'OpenAI, Anthropic, plus Apollo Blackstone contract. with this gap down trading at less than 0.7 PEG. THIS IS BUY THE DIP opportunity. As future XPU incorporates HBM/GPU margin will go up. Apollo contract only beginning.'

Morningstar bumped its stock price target from £408 ($550) to £483 ($650), anticipating a 36 per cent jump after the sharp selloff. 'Management expects to ship capacity for 10 gigawatts of compute in 2027, and we believe it will earn well above $10 billion per gigawatt,' its analysts predicted.

The Jefferies Group also followed suit, increasing its £371 ($500) price target to £408 ($550), keeping its 'Buy' rating on the stock. The investment firm expects Broadcom's operating margins to bounce back as AI revenue picks up next year and beyond.

Upcoming Broadcom Projects to Fuel Revenue Growth

The optimism is justified after Broadcom confirmed new Google projects in April. The chipmaker said it struck a deal to develop Google's Tensor Processing Units, and to supply parts for the next iteration of Google AI racks. Broadcom's Meta partnership now also includes developing Meta's AI accelerators.

Anthropic and OpenAI are also expected to depend more on Broadcom's AI chips for the next two years at least, a bright outlook considering this year's nearly 200% growth forecast. On Stocktwits, the retail sentiment for AVGO has almost peaked to an extremely bullish 99/100.

Broadcom Stock Up by Almost 40% in Q1 Results

Broadcom stock remains in the green so far this year, its gain approaching 40 per cent as of Wednesday. That tops the Nasdaq's 16% gain despite today's premarket plunge. Broadcom's Q1 revenue climbed 48 per cent to £17 billion ($22.19 billion), outpacing analyst estimates.

Net profit also rose to £6.9 billion ($9.31 billion) from last year's £3.7 billion ($4.97 billion), that's a profit of $2.44 per share adjusted.

Thursday's dramatic plunge revealed the sharp disconnect between institutional investors and retail traders. While investors punished Broadcom for conservative fiscal 2027 AI guidance, analysts perceived the guidance as intentionally sandbagged.

Meanwhile, the company assured investors of sustained growth. 'We expect this momentum to continue into fiscal year 2027 and reiterate our AI semiconductor revenue guidance to be in excess of $100 billion,' said Hock Tan, Broadcom CEO.

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