Citi raises Broadcom price target to $500, cites stronger AI demand for April quarter beat

On May 12, Citi analyst Atif Malik raised Broadcom's price target to $500 from $475 and maintained a Buy rating, citing stronger AI demand that could help the company deliver April quarter results slightly above expectations.

Broadcom has agreements with Google, Meta, Anthropic, and OpenAI for custom AI chips, plus two unnamed customers (one believed to be ByteDance), and is in discussions with three additional customers on custom chips. The shift from rack shipments to chips may support gross margins.

Citi models April-Q and July-Q sales and earnings per share modestly above consensus, driven by stronger AI demand and improved earnings visibility.