Goldman Sachs urges investors to buy Broadcom dip with still AI revenue trajectory intact
Goldman Sachs urged investors to buy Broadcom shares on weakness after the chipmaker’s Q2 results. It kept a Buy rating and raised its 12-month target to $525 from $500. Q2 revenue was $22.2B; AI semiconductor revenue rose 143% to $10.8B. Q3 AI guidance of $16.0B missed estimates, but total revenue guidance beat. Goldman cited intact AI growth, including AI revenue forecasts of $57B (FY26), $133B (FY27) and $193B (FY28).
Street reaction risk centers on Q3 AI semiconductor guidance missing estimates, but the note argues the medium-term AI revenue trajectory remains intact.
Goldman maintained a Buy on Broadcom after Q2 results, raised its 12-month target to $525, and framed AI guidance as a ramp delay.
Near-term downside may be limited if traders buy the dip on the raised target and reiterated 2027+ AI revenue outlook.
Background
Goldman’s note follows Broadcom’s Q2 print, focusing on AI semiconductor growth, margins, and the gap between Q3 AI guidance and expectations.
Why it matters
The trade hinges on whether the market treats the Q3 AI semiconductor guidance shortfall as a temporary ramp delay versus a demand deterioration signal; the raised target and detailed 2027/2028 AI revenue estimates are the offset.
Market relevance
A post-earnings buy-the-dip call: the note highlights strong AI growth and margins while addressing the Q3 AI guidance miss as timing-related.
Market effects
Reinforces the AI infrastructure spend narrative (custom silicon + AI networking) and suggests supply-chain tightness may not derail top AI semis.
Primarily US large-cap semis sentiment; can influence broader US AI-chip complex risk appetite.
Hyperscaler-linked custom silicon ramps (Google/Meta/OpenAI/Anthropic) remain a global demand signal for AI compute supply chains.
Alternative perspectives
The AI semiconductor guidance miss could reflect more than ramp timing—if customer qualification delays persist, 2027 revenue confidence may be overstated.
The note leans on management explanations; traders may still discount the magnitude of the Q3 AI shortfall versus both Goldman and Street estimates.
Key entities
- companyBroadcom Inc
US chipmaker with AI semiconductor revenue growth, Q3 AI guidance below estimates, and a reiterated 2027+ AI revenue trajectory.
- financial_institutionGoldman Sachs
Maintained Buy rating and raised 12-month price target to $525, arguing the AI ramp delay is near-term only.
- customerGoogle
Named custom silicon engagement within Broadcom’s AI accelerator customer base.
- customerMeta
Named custom accelerator engagement with gigawatt delivery schedule into 2027-2028.
- customerOpenAI
Named custom silicon engagement with initial product expected in FY2026 and 1.3 gigawatts in 2027.
