Broadcom Limited (AVGO) PT Raised to $220 at Mizuho

Mizuho analyst Vijay Rakesh raised the price target on Broadcom Limited (NASDAQ: AVGO) to $220.00 (from $190.00) while maintaining a Outperform rating.

The analyst commented: "New Hardware Platforms with OpenAI ChatGPT5+ - Potentially a Mammoth $16B/yr Custom AI ASIC Opportunity 2H25-2026E. Our call noted OpenAI custom AI chip roadmap potentially launching late 2H25E on TSMC 2/3nm with 1.6nm second gen chip potentially in 2026-27E. AVGO's OpenAI chip win potentially unlocks >$16B opportunity for AVGO (assuming ~10% search query market share and ~$0.04/query cost) as our speaker noted AVGO has potentially won partnerships for OpenAI's first and second generation AI custom ASICs. Our call noted AVGO in 2nd position in the accelerator market (vs NVDA) with its strong product portfolio, driving improved power efficiency, scalability and optical engine/interconnect integrations for customers.

Raise estimates and PT to $220 from $190 - Our OctQ rev/EPS remain at $14.0B/$1.37 (cons. $14.1B/ $1.39), as we raise F25E from $60.5B/$6.11to $61.3B/$6.27 (cons. $60.8B/$6.23), and F26E from $66.8B/$6.86 to $68.6B/$7.31 (cons. $68.1B/$7.27). Raise PT to $220 (prior $190), 35x F25E EPS (prior 31x), inline with expanded SOX multiples at 25x (prior 21x), and a premium with AI revenue growing >70% CAGR (F23-26E) and leading GM/OM at 77%/61%, as we see potential tailwinds from AVGO being OpenAI's partner on its first 2 generations for an in-house AI accelerator."

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