Expectations of Strong Results are Prompting Goldman Sachs to Bet on This Company

Analyst James Schneider, who recommends buying Broadcom shares, raised his price target from $380 to $435, implying that the stock could gain about 13% from its last price. The company will report its financial results on December 11.

“We expect sustained strong AI-driven demand in the fourth quarter, as well as first-quarter guidance above market expectations due to solid spending from key customers — and we expect the updated AI revenue outlook for fiscal 2026 to show more than 100% year-over-year growth,” he wrote.

The analyst forecasts that Broadcom’s AI revenues in 2026 will reach $45.4 billion, representing roughly 128% year-over-year growth. By 2027, this segment could grow to $77.3 billion, or 70% annual growth.

The change in the price target and forecasts comes during a week in which Broadcom shares have already shown strong performance — a 13% rise since the start of the week, boosted by the positive momentum in Alphabet. Broadcom helps Google’s parent company design its proprietary in-house AI chips.

The analyst notes that investors next year will closely watch the contributions from Google and OpenAI, as well as the development of Broadcom’s margins in 2026.

“We believe expectations are high heading into earnings and that investors are positioned positively due to strong results across the sector and upbeat data linked to key customers for XPU chips, most notably Google following its recent Gemini 3 launch,” he added. “Due to the gross-margin dilution from the custom XPU business, we expect the focus in 2026 to be on margin development, as XPU revenues accelerate (over +160% year-over-year growth in our estimates).”

The combination of Goldman Sachs’ higher price target, expectations for very strong AI revenue growth in 2026–2027, positive investor positioning, and Broadcom’s direct involvement in major AI projects for Google and OpenAI creates a clearly positive catalyst for the stock in the short and medium term.

The strong 13% weekly gain, along with the projected double- and triple-digit increases in AI revenues, suggests that the market is turning increasingly optimistic — and if the company meets or exceeds expectations on December 11, the stock will likely see additional upside support.

The main risk remains pressure on margins from the custom XPU business, but for now the strong revenue growth outweighs this factor.