Broadcom shares are commanding significant market attention following a bullish assessment from Jefferies, which has designated the semiconductor manufacturer as its premier investment selection. The financial institution points to a substantial inflection point in Broadcom’s artificial intelligence operations as the core reason for this elevated status. This optimistic outlook emerges even as the stock experienced a minor retreat in the previous trading session, with analysts identifying what could be the next major growth catalyst.
Dual Growth Engines Drive Performance
The company’s strategic positioning is particularly compelling due to its dual-pronged growth strategy. Alongside its rapidly expanding AI chip division, Broadcom continues to systematically integrate VMware following its massive acquisition. Over the past 24 months, the corporation has successfully transitioned major VMware clients from traditional licensing arrangements to the subscription-based “VMware Cloud Foundation” platform. This shift establishes a foundation of predictable, recurring software revenue that complements its hardware operations.
This balanced approach creates a unique standing within the technology sector, combining explosive growth in AI hardware with stable software income streams. The market has responded favorably to this strategy, with share values having nearly doubled year-over-year and currently trading close to their 52-week peak.
Custom Chip Business Fuels Optimism
The centerpiece of the current enthusiasm revolves around Broadcom’s custom chip manufacturing segment. Jefferies projects that shipments of Google’s Tensor Processing Units (TPUs), for which Broadcom serves as a crucial supplier, will surge to approximately 3 million units by 2026. This represents a doubling from the anticipated 1.5 million units expected to ship this year.
Should investors sell immediately? Or is it worth buying Broadcom?
Google represents just the beginning of this expansion narrative. AI enterprise Anthropic is poised to become another major client, with plans to receive roughly 250,000 units in 2026, providing additional substantial revenue acceleration. The momentum is expected to intensify further in the latter half of 2026, with Meta scheduled to launch its first proprietary AI chip in the third quarter and OpenAI following with its inaugural chip in the fourth quarter – both establishing new customer relationships with Broadcom.
December Earnings to Validate Progress
The next critical evaluation arrives on December 11, when Broadcom discloses its quarterly financial results. This report will demonstrate whether the optimistic projections from market analysts have tangible foundation. Experts are eagerly anticipating updates regarding AI chip demand dynamics and the ongoing progression of VMware integration. The prevailing sentiment among research professionals remains unequivocally positive, maintaining a “Strong Buy” consensus recommendation.
From a technical analysis perspective, the equity is currently confronting resistance at the $374.45 price level – a threshold that market participants will likely monitor closely in upcoming trading sessions.
Ad
Broadcom Stock: Buy or Sell?! New Broadcom Analysis from November 5 delivers the answer:
The latest Broadcom figures speak for themselves: Urgent action needed for Broadcom investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from November 5.
Broadcom: Buy or sell? Read more here...
