Wells Fargo analyst Aaron Rakers turned more bullish on Broadcom Inc (NASDAQ:AVGO), arguing that Wall Street may still be underestimating the scale of AI infrastructure demand tied to hyperscaler data center expansion.

Wells Fargo Raises Broadcom Forecast To $545

Rakers maintained an Overweight rating on Broadcom and raised his price forecast to $545 from $430.

The upgrade followed a new Wells Fargo framework that links AI semiconductor demand directly to physical data center power capacity rather than relying on traditional market-sizing models.

Broadcom shares rose about 5% to $438 after the analyst call.

Rakers Sees AI Demand Running Above Consensus

Rakers said the firm's new "pluggable gigawatt-driven" model suggests AI semiconductor revenue is tracking 30% to 40% above prior Wall Street expectations.

The framework incorporates demand from large hyperscaler AI deployments, including Alphabet Inc's (NASDAQ:GOOGL) Google TPU program, Meta Platforms Inc's (NASDAQ:META) MTIA initiative, and other gigawatt-scale AI infrastructure projects.

According to Wells Fargo, the methodology captures rising shipments of custom AI accelerators tied to expanding cloud AI capacity.

Wells Fargo Lifts Long-Term Financial Forecasts

The stronger AI outlook prompted Wells Fargo to raise Broadcom's fiscal 2027 revenue and earnings-per-share estimates by 22% and 19%, respectively, versus consensus expectations.

The firm also increased its fiscal 2028 revenue forecast by 28% and EPS projections by 23%.

Rakers' revised outlook suggests Broadcom could emerge as one of the major beneficiaries of accelerating AI infrastructure spending as hyperscalers continue building larger AI data center networks.

Technical Analysis

From a trend perspective, AVGO is still in a firmly bullish structure: it's trading 4.1% above its 20-day SMA ($415.54) and 25.2% above its 200-day SMA ($345.50). The 20-day SMA remains above the 50-day SMA (bullish), and the golden cross that formed in April keeps the longer-term trend bias pointed higher.

Momentum is where the chart is a bit more mixed right now. MACD is below its signal line with a negative histogram, which is a common "cooling off" look that tells traders upside pressure is fading versus the prior upswing unless momentum can re-accelerate.

Price is also pressing into the upper end of its 52-week range, sitting just under the $437.68 high (reached in May). When a stock is this extended above its longer moving averages, traders often watch for either a clean breakout to new highs or a pullback that holds higher support levels without breaking the trend.

  • Key Resistance: $437.50 — sitting just below the 52-week high zone, where upside attempts can stall if buyers don't follow through
  • Key Support: $370.50 — a prior buyer-defense area that also sits near the broader uptrend's "pullback zone" above the 50-day SMA ($365.11)

Earnings & Analyst Outlook

Looking further out, the next major catalyst for the stock arrives with the June 3, 2026 (confirmed) earnings report.

  • EPS Estimate: $2.32 (Up from $1.58 YoY)
  • Revenue Estimate: $22.06 Billion (Up from $15.00 Billion YoY)
  • Valuation: P/E of 81.2x (Indicates premium valuation relative to peers)

Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price forecast of $476.91. Recent analyst moves include:

  • Wells Fargo: Overweight (Raises Forecast to $545.00) (May 14)
  • Citigroup: Buy (Raises Forecast to $500.00) (May 12)
  • Mizuho: Outperform (Maintains Forecast to $480.00) (April 16)

Price Action

AVGO Stock Price Activity: Broadcom shares were up 3.63% at $431.92 at the time of publication on Thursday. The stock is trading near its 52-week high of $437.68, according to Benzinga Pro data.

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