Why Wall Street Thinks You Should Buy Broadcom Stock Before June 3

As Broadcom (AVGO) gears up to unveil its Q2 FY2026 results and business outlook after the closing bell on Wednesday, June 3, Wall Street appears ready to roll out the red carpet. Susquehanna has thrown its weight behind Broadcom ahead of the company's Q2 earnings drop, bumping its price target from $450 to $490 and holding firm on its “Positive” rating. 

The bull case rests squarely on accelerating demand for Broadcom's custom application-specific integrated circuits (ASICs) and its artificial intelligence (AI) networking products. Analysts led by Christopher Rolland see both businesses delivering real upside through the calendar year's first quarter, with custom XPU momentum holding its ground on continued growth inside Alphabet's (GOOG) (GOOGL) Google Tensor Processing Unit (TPU) ecosystem.

Investors need to keep their feet on the ground for the calendar year's second quarter guidance. Susquehanna flags that Anthropic's initial nearly $10 billion TPU order, originally slated for the second half of fiscal 2026, will strip out rack-level revenue from the arrangement. Broadcom's piece of that deal looks set to stay limited to chips, which noticeably trims the revenue opportunity.

The change has meaningful forecasting implications. Analysts now estimate the Anthropic order contributes roughly $2.5 billion and have pulled the fiscal 2026 AI revenue projection down to about $55 billion from approximately $62.5 billion. Even so, the adjustment reflects deal structure changes rather than weakening customer demand.

The broader growth story has not lost its spine, which makes the run-up to June 3 a meaningful moment for investors to take a good hard look at Broadcom.

About Broadcom Stock 

Based in Palo Alto, California, Broadcom develops semiconductor technologies and infrastructure software that sit at the heart of AI networks, cloud computing platforms, data centers, broadband systems, and wireless connectivity.

Commanding a market cap of $4.7 billion. Its lineup spans custom silicon, Ethernet networking solutions, fiber optic technologies, cybersecurity offerings, and VMware-powered cloud platforms. These products help enterprises build, protect, and operate large scale digital and AI infrastructure across the globe.

Broadcom’s shares have enjoyed a remarkable run. Its stock climbed 93.48% in the past 52 weeks and advanced 39% year-to-date (YTD). Over the last three months alone, shares surged 50.93%. 

Moreover, the rally reached another milestone on June 1 when the stock punched its way to a fresh 52-week high of $466.05 on June 1, gaining 2.95% intra-day. And already today, it hit a new high of $488.82, gaining 4.62% intraday. 

From a valuation standpoint, AVGO stock is sitting at a premium as it trades at 43.05 times forward adjusted earnings and 21.13 times sales. Both figures sit comfortably above the broader industry average as well as their own five-year historical multiple.

Broadcom has also grown its dividend for 15 consecutive years. The company pays an annual dividend of $2.60 per share, which works out to a dividend yield of 0.57%. The company distributed its most recent quarterly dividend of $0.65 per share on March 31 to shareholders of record as of March 23.

Broadcom Surpasses Q1 Earnings

Broadcom dropped its Q1 FY2026 earnings on March 4 and watched the stock climb 1.2% that same day, followed by another 4.8% gain in the next trading session. Revenue grew 29.5% year-over-year (YOY) to $19.3 billion, clearing the analyst estimate of $19.1 billion. Non-GAAP EPS rose approximately 28.1% YOY to $2.05, edging past the estimate of $2.03. 

A closer look under the hood revealed that gross margin increased 29.7% from the prior year to $13.2 billion. Adjusted EBITDA rose 30.2% YOY to $13.1 billion. Non-GAAP net income also advanced 30.2% to reach $10.2 billion.

The Semiconductor Solutions business continued to pull its weight, with revenue rising 52.4% from the year earlier period to $12.5 billion. However, a soft note in the report came from the Infrastructure Software segment anchored by VMware, which mustered only 1.4% YOY growth to reach $6.8 billion.

On the balance sheet, Broadcom closed the fiscal quarter with cash and cash equivalents of $14.17 billion, down from $16.17 billion at the end of the prior fiscal quarter. The company generated $8.26 billion in cash from operations, spent $250 million on capital expenditures, and arrived at $8.01 billion in free cash flow.

For Q2, Broadcom has set revenue guidance at $22 billion and expects to hold adjusted EBITDA margin at 68%. On the other hand, analysts forecast Q2 FY2026 EPS to grow 51.9% YOY to $2.02. The full FY2026 bottom line is projected to rise 76% from the prior year to $9.91, while FY2027 EPS carries an estimate of 66.4% growth to $16.49.

What Do Analysts Expect for Broadcom Stock?

Wall Street continues to back Broadcom with conviction, assigning AVGO stock an overall “Strong Buy” rating. Among 42 analysts covering the stock, 34 back it with a "Strong Buy," three weigh in with a "Moderate Buy," and five settle on a "Hold."

To that end, the stock’s average price target of $480.49 represents marginal upside of 0.45%. Meanwhile, the Street-High target of $630 suggests a more substantial gain of 31.7% from current levels.