Broadcom Inc. (NASDAQ:AVGO) Growth Outlook

Bank of America analysts predict strong growth for Broadcom’s AI revenues, anticipating a compound annual growth rate (CAGR) of 30-35% in the near future.

The analysts maintained a Buy rating on Broadcom, highlighting the company’s leadership in AI compute and networking along with significant free cash flow generation.

However, they lowered fiscal 2025 earnings expectations due to seasonal headwinds, particularly from the transition of Google’s Tensor Processing Unit (TPU), which is expected to affect revenue mainly in the first half of the year.

Despite this, new AI and networking contracts, alongside additional opportunities with Apple (NASDAQ:AAPL), could result in an adjusted earnings per share (EPS) of $7.31 by 2026.

Though Broadcom’s return to quarterly guidance might increase focus on seasonal fluctuations and uneven AI shipments, BofA analysts remain optimistic about the company’s AI growth trajectory. They estimate AI revenues could grow from 23-24% of current sales to over 30% by fiscal 2026.

The analysts emphasized Broadcom’s strategic positioning in AI, suggesting potential growth from partnerships with clients like OpenAI, enhancing prospects from fiscal 2026 onward.

As AI adoption speeds up, BofA asserts that Broadcom’s emphasis on high-performance AI networking solutions—especially those complementing NVIDIA’s upcoming Blackwell architecture—will solidify its industry standing.

With a price target of $215, BofA believes Broadcom’s offerings provide a unique blend of stable enterprise software revenue, mid-teens sales growth, and strong dividend growth potential.