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Broadcom (AVGO) shares inched higher on Friday after BMO Capital Markets initiated coverage of the semiconductor giant with an “Outperform” rating.
Citing artificial intelligence (AI) tailwinds, analyst Harsh Kumar set his price target for AVGO at $455, indicating potential upside of more than 25% from current levels.
Kumar’s research note arrives at a time when Broadcom stock has pulled back amid a broader tech rout. At the time of writing, it’s down about 25% versus its year-to-date high.
Why BMO Is Bullish on Broadcom Stock
BMO's bullish thesis is anchored in Broadcom’s increasingly important role in the AI infrastructure buildout.
Kumar described the company as the “leading AI supplier in custom ASIC (XPU) and networking,” highlighting the two businesses that sit at the heart of its AI opportunity.
The analyst is particularly bullish on the renewed supply agreement with Apple (AAPL), believing it could add significant long-term stability and upside to AVGO shares.
That said, Barchart currently holds a “24% SELL” opinion on Broadcom, indicating technical momentum isn’t in favor of continued upside through the remainder of 2026.
AVGO Shares Deserve a Premium
Harsh Kumar views the recent selloff in Broadcom shares as an opportunity to load up on a quality name at an attractive valuation.
At about 35x forward earnings, the company currently trades at a premium to the AI darling Nvidia (NVDA), but the analyst remains undeterred given management’s impressive fiscal 2027 guidance for over $100 billion in AI revenue.
This is underpinned by AVGO’s strong ties to U.S. hyperscalers, including Meta Platforms (META) and Alphabet's (GOOG) (GOOG) Google.
Investors should also note that Broadcom currently pays a dividend yield of 0.71%, which makes it even more compelling as a long-term holding, at least for income-focused buyers.
Broadcom Remains Buy-Rated Among Wall Street Firms
Crucially, BMO Capital Markets is actually among the more conservative Wall Street firms on AVGO stock.
According to Barchart, the consensus rating on Broadcom sits at “Strong Buy,” with the mean price target of about $519 indicating potential upside of more than 40% over the next 12 months.
