Is Broadcom (AVGO) Stock Worth Buying Ahead of Wednesday’s Earnings

Posted on by

TLDR

  • Broadcom (AVGO) will release Q1 FY2026 earnings on March 4, 2026
  • Wall Street anticipates $19.21 billion in revenue, a 29% year-over-year increase
  • EPS is forecast at $2.02, up 26% from the prior year; Broadcom has exceeded estimates in each of the last nine quarters
  • The AI chip business is projected to reach $8.2 billion this quarter, doubling year-over-year
  • UBS rates the stock Buy with a $475 target; analysts overall have a Strong Buy consensus and an average target of $452.32

Broadcom is scheduled to announce Q1 FY2026 results on March 4, 2026. The report comes with elevated Wall Street expectations and several key points to monitor closely.

AVGO Stock Card

Analysts predict $19.21 billion in quarterly revenue, representing 29% growth versus the same period last year.

For earnings, the consensus estimate is $2.02 per share, a 26% year-over-year rise. Broadcom has beaten analyst forecasts in each of the past nine quarters, setting a high bar for the upcoming report.

has gained 60% over the last 12 months, mainly fueled by demand for the company’s custom AI chips. The stock is down about 8% year-to-date.

The options market is pricing in an 8.64% implied move around the earnings date, reflecting the uncertainty leading up to the release.

AI Chip Business in Focus

Broadcom’s AI chip revenue is expected to hit roughly $8.2 billion this quarter—nearly double the figure from the same quarter last year. This growth is driven by large tech firms expanding their data center capacity.

On February 26, stated that demand for a new AI chip using advanced stacking technology is likely to be very robust. Reuters reported shipments could reach at least one million units by 2027.

The company has also begun shipping its first 2nm custom compute system-on-chip, built on its 3.5D eXtreme Dimension System in Package platform. Broadcom notes the design boosts power efficiency and reduces latency for AI clusters.

This is a technically significant advancement. Smaller node sizes typically enable more processing power with less energy—critical for large-scale AI infrastructure.

VMware Software Segment Under Watch

While the chip division looks solid, analysts are closely monitoring infrastructure software unit, which grew significantly following the VMware acquisition.

UBS analyst Timothy Arcuri reaffirmed a Buy rating ahead of the report, with a $475 price target. He noted recent stock weakness seems tied to lower valuation multiples across software companies, not issues with Broadcom’s chip business.

Arcuri highlighted risks in the software segment, including potential customer churn at VMware when contracts renew.

He also pointed to slower growth after recent upgrade cycles and the rise of AI coding tools that could shift more workloads to the cloud.

Wall Street remains broadly positive on the stock. Of 30 analyst ratings in the past three months, 28 are Buys, two are Holds, and there are no Sells.

The average price target across these analysts is $452.32, suggesting roughly 41.5% upside from current levels.

As it heads into the March 4 earnings report, Broadcom has started shipping its 2nm custom SoC.