Broadcom in focus as UBS sees upside to Q4 guidance

[Broadcom headquarters in San Jose, California, United States]
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Broadcom (NASDAQ:AVGO [https://seekingalpha.com/symbol/AVGO]) was in focus on Monday as investment firm UBS said it sees the potential for upside to guidance for the coming fourth-quarter, citing better unit trends for Google's (GOOG [https://seekingalpha.com/symbol/GOOG]) (GOOGL [https://seekingalpha.com/symbol/GOOGL]) newest tensor processing unit, the TPUv6p.

“We expect in-line results and potential upside to Street's ~$17.0B for FQ4 (Oct) driven by better unit trends for TPUv6p, while non-AI revenue is up only slightly given content headwinds at Apple,” analysts at the firm wrote in a note to clients.

The analysts continued: “Our expectation is that TPUv6p will experience a sharp ramp in 2H25, extending into '26 as our checks indicate [chip-on-a-wafer-substrate] wafer requirements increasing 51% Y/Y. Ergo, we think AI revenue could be up ~60% Y/Y in CY25, with [average selling prices] trending higher as TPUv6p folds into the mix.”

Aside from that, the investment firm said that Broadcom is likely to reiterate its expectation of a $60B to $90B serviceable addressable market for custom chips, while AI-related networking should strengthen into fiscal 2026 amid an increased push in Ethernet architecture deployment.

In conjunction, the firm reiterated its Buy rating and raised its price target to $345 from $290.

Broadcom is set to report its next quarterly results on Sept. 4. A consensus of analysts expect [https://seekingalpha.com/symbol/AVGO/earnings/estimates?period=quarterly] the firm to earn $1.66 per share on $15.82B in revenue.

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