Broadcom can likely ship its $115 billion AI plan in FY27, but the price already needs it plus heavy customer funding risk. I see about 6% upside to $399.41 and rate it Hold.
Key points
- $16.7 billion in Q3 FY26 of AI chip sales grew 221% in Q3 FY26 and drove the record quarter.
- $115 billion in FY27 of planned AI sales is backed by secured supply in FY27.
- $126.8 billion in Q3 FY26 of purchase promises plus a $29 billion backup promise in Q3 FY26, where Broadcom pays if the customer does not pay, frame the risk.
The call
The price demands near perfect delivery on AI chips. At $376.51 a share in October 2026, the market needs about $167.2 billion of sales in FY27. That also needs about $17.75 of profit per share in FY27.
Quarterly revenue jumps with AI, forecast run-rate higher- Reported revenue
- My forecast
SEC XBRL company facts via desk briefing to Q3 FY26; Q4 FY26 company guide and FY27 desk arithmetic.
Delivery can still leave the stock flat for a year. I expect $115 billion of AI sales in FY27 with supply secured. I expect 64% operating margin in FY27, or profit after running costs as a share of sales.
Valuation
| Driver | Estimate |
|---|
| Sales in FY27 | $167.2 billion in FY27 |
| Operating profit in FY27 | $107 billion in FY27 |
| Profit per share in FY27 | $17.75 per share in FY27 |
| Multiple in FY27 | 22.5 times earnings in FY27, or price paid for each dollar of profit |
| Target in 12 months | $399.41 per share in 12 months |
| The 22.5 times multiple in FY27 fits fast growth with heavy customer and funding risk in FY27. The $399.41 per share target in 12 months sits about 6% above the price in October 2026. That small gain means a Hold. | |
Target rests on AI delivery: $100B breaks the caseArithmetic in this run: FY27 $167.2B revenue, 64% op margin, 22.5x my $17.75 EPS.
Risks
- Big AI buyers delay data centers in FY27, seen in falling orders and weak chip shipments in FY27.
- Memory and parts run short in FY27, seen in flat AI sales while orders stay strong in FY27.
- Software renewals weaken in FY27, seen in slow cash collection and discounting in FY27.
What would change my mind
I would turn positive if cash backed the $115 billion AI plan in FY27 with the backup promise unused in FY27.