Wolfe Research upgraded Broadcom Limited from Peerperform to Outperform on Friday and assigned a $400.00 price target, flagging the company as a principal beneficiary of Google’s Tensor Processing Unit strategy.
The research house bases its upgrade on Wolfe’s forecast that Google’s TPUs will expand materially - to 7 million units per year by 2028 - and that making those TPUs available to third parties establishes a genuine competitor to Nvidia. Wolfe identifies Broadcom as the "main beneficiary" of that shift.
Revenue and shipment assumptions
Wolfe Research raised its calendar year 2026 AI ASIC revenue estimate to roughly $44.0 billion, a figure tied to an assumed 3.3 million TPU shipments in 2026. For 2027, the firm projects AI revenue of $78.4 billion based on about 5.1 million TPU shipments. Wolfe expects TPUs to account for the majority of XPU growth in its model.
On the networking side, Wolfe models $15.1 billion of revenue in 2026 - roughly 75% year-over-year growth - a pacing that the firm describes as consistent with its networking revenue estimate for Nvidia. The research house projects 2027 AI networking revenue to grow by approximately 55% year-over-year.
Earnings and valuation framework
Under Wolfe’s scenario work, Broadcom could reach approximately $16.00 in earnings per share by 2027. The firm describes a bull-case outcome near $18.00 EPS if Broadcom were able to double its AI revenue again in that year. The $400 price target corresponds to about 22 times the bull-case earnings power - below Broadcom’s three-year average multiple of roughly 25 times.
Capital and analyst activity
In corporate finance moves, Broadcom has issued $4.5 billion of senior notes across various maturities and interest rates, a financing action the company says is intended to facilitate debt redemption, according to a filing with the U.S. Securities and Exchange Commission.
Analyst coverage around Broadcom has been active. Wells Fargo upgraded the stock to Overweight and increased its price target to $430.00, citing potential growth catalysts through 2026. RBC Capital initiated coverage with a Sector Perform rating and a $370.00 price target, pointing to ongoing debates about the magnitude of AI-related growth. Bernstein reiterated an Outperform rating with a $475.00 price target and addressed investor concerns about competition in the AI space.
Takeaway
Wolfe Research’s upgrade centers on a scenario in which broad adoption of Google’s TPUs - including third-party access - materially enlarges XPU demand and networks revenue, positioning Broadcom to capture a substantial share of that opportunity. Other broker-dealers present a range of views on how AI-related competition and adoption will translate into near-term financial outcomes.