Jim Cramer believes Broadcom shares will recover, supported by a newly announced deal with Apple to design custom chips and FY2027 AI revenue guidance that exceeded analyst expectations. UBS maintains a Buy rating with a $485 price target, noting that the Apple contract and existing deals with major cloud and AI companies provide visibility into Broadcom's financial trajectory.
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Jim Cramer expressed confidence that Broadcom shares will recover, citing a newly announced contract with Apple to design custom chips (ASICs). Broadcom's stock has risen 42% over the past year and 11% year-to-date. Separately, Emerald Wealth Partners noted in its Q1 2026 investor letter that Broadcom delivered strong quarterly results, with FY2027 AI revenue guidance exceeding expectations and prompting analyst upgrades.
Why it matters
The Apple deal provides visibility into Broadcom's future capacity and finances, according to UBS, which maintains a Buy rating and $485 share price target. Management also addressed investor concerns about margin risks, competition from hyperscalers (large cloud providers) building their own chips, and software disintermediation — issues that have weighed on the stock.
What to watch
UBS reiterated its Buy rating on June 12th with a $485 share price target. Broadcom also has contracts with Apollo, Blackstone, OpenAI, and Anthropic, which contributed to analyst confidence in the company's near-term outlook.
Broadcom's stock momentum has been supported by its strategic positioning in the AI infrastructure supply chain. Beyond the Apple deal, the company benefits from contracts with major hyperscalers and AI companies including Apollo, Blackstone, OpenAI, and Anthropic—relationships that provide both near-term revenue certainty and insulation from individual customer concentration risk. The Q1 2026 results underscore this strength: while quarterly revenue and earnings per share only slightly exceeded consensus, the real driver of analyst optimism was FY2027 AI revenue guidance, which significantly surpassed expectations and triggered multiple analyst upgrades to sales and profit estimates.
Investor concerns about Broadcom's exposure to competitive pressures—particularly hyperscalers designing their own chips—have persisted. However, management's ability to counter these concerns at the latest analyst call, combined with the high-profile Apple relationship, suggests the company is maintaining premium positioning despite the shift toward custom silicon. The convergence of strong forward guidance, visible contracts with marquee customers, and explicit management reassurance on margin and competitive risks appears to have restored confidence among both equity analysts and influential market commentators like Cramer.
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