In every major technology cycle, there comes a moment when the numbers stop looking like projections and start looking like history being made in real time. Broadcom (AVGO) may be the king of the moment.HSBC raised its price target on Broadcom, maintaining its Buy rating, as the firm dramatically revised its estimates for the company’s custom AI chip business upward ahead of second-quarter fiscal 2026 earnings. AVGO is up 39.43% year-to-date and 95.20% over the past year, according to Yahoo Finance, with the stock trading at fresh all-time highs around $488.The core of HSBC’s revision is a specific claim about where Broadcom’s ASIC revenue is heading — and the answer is a number that reframes the entire AI infrastructure investment thesis.Also Read: Broadcom Inc. Latest NewsHSBC revised Broadcom’s Stock price target to $600 from $450HSBC’s price target revision to $600 from $450 in a note shared with TheStreet is not driven by incremental model tweaks. It is driven by a fundamental reassessment of the pace at which Broadcom’s custom AI accelerator business is scaling.Related: Susquehanna resets Broadcom stock target ahead of earningsAs Investing.com confirmed, HSBC raised its fiscal year 2026 ASIC revenue estimate to $46 billion, 23% above Street consensus. Also, its fiscal year 2027 estimate was lifted to $100.2 billion, 26% above Street expectations. The mechanism behind those revisions is specific.Broadcom also has a rich list of recent partnershipsGoogle’s TPU v7 deliveries are beginning, with Broadcom supplying the custom silicon. Meta is ramping its MTIA AI accelerator, also built with Broadcom. Anthropic has been added as a new customer under a multi-year agreement, with deployments starting in the second half of fiscal year 2026. OpenAI is another major customer, with deployments expected to begin in fiscal year 2027. According to the note, HSBC expects shipments to Anthropic and OpenAI to more than double in fiscal year 2027.Related: Analysts reset Broadcom stock price targetThe packaging capacity equation supports the ramp. HSBC believes Broadcom has secured incremental CoWoS packaging capacity from suppliers, including Amkor and ASE, estimating 260,000 wafers in fiscal year 2026 and 480,000 wafers in fiscal year 2027, according to Investing.com.That packaging capacity unlock is what enables the revenue projections — without it, even the strongest demand would face a physical supply ceiling.Broadcom’s Google supply agreement runs through 2031, according to Reuters. Meta’s agreement is similarly multi-year. These are not purchase orders. They are structural commitments that provide revenue visibility the market has not fully priced in.
AVGO has returned 517% over three years and 1,023% over five years compared to the S&P 500’s 77% and 80%, respectively.NurPhoto via Getty Images
Broadcom’s Q2 fiscal 2026 guidance set the financial foundationBefore the HSBC revision arrived, Broadcom’s Q1 fiscal 2026 results from March 4 already told a story of extraordinary momentum:Total revenue of $19.31 billion, up 29% year over yearAI semiconductor revenue of $8.4 billion, up 106% year over year — above the company’s own forecastQ2 fiscal 2026 revenue guidance of approximately $22.0 billion, up 47% year over yearAdjusted EBITDA guided at approximately 68% of Q2 revenue
Source: Broadcom Inc. First Quarter Fiscal Year 2026 Financial Results
“Our AI revenue growth is accelerating, and we expect AI semiconductor revenue to be $10.7 billion in Q2,” said Broadcom CEO Hock Tan in the Q1 earnings release.Analysts heading into Q2 earnings, which are scheduled for Wednesday, June 3, expect revenue of approximately $22.1 billion and EPS of $2.32, according to Benzinga data.Related: Susquehanna resets Broadcom stock target ahead of earningsBroadcom has beaten revenue estimates in five straight quarters and EPS estimates in more than 20 consecutive quarters, according to the same source. The question for Wednesday is not whether Broadcom beats. In fact, it is how far above consensus it lands, and what the forward guidance implies about the ASIC ramp HSBC is projecting.The hyperscaler partnership ecosystem that makes HSBC’s $100B estimate credibleMy review of Broadcom’s partnership activity in 2026 shows a company that has systematically locked in the five largest AI spenders as multi-year ASIC customers simultaneously.Google’s TPU program, extending through 2031, represents years of contracted custom silicon demand. Meta’s MTIA accelerator program is ramping up production. Anthropic’s deal — powered through Google’s infrastructure relationship with Broadcom — is beginning deployment. OpenAI’s agreement covers what management has described as a massive custom hardware and networking infrastructure project supporting its scaling requirements.More Tech Stocks:Morgan Stanley sets jaw-dropping Micron price target after eventNvidia’s China chip problem isn’t what most investors thinkQuantum Computing makes $110 million move nobody saw comingBeyond custom silicon, Broadcom’s VMware Cloud Foundation 9 enterprise rollouts are generating enterprise software revenue that compounds the semiconductor story. The Samsung 5G and Wi-Fi 8 partnership seeds AI processing at the network edge. The UCLA Semiconductor Hub partnership, alongside Meta, Applied Materials, GlobalFoundries, and Synopsys, signals Broadcom’s embedding itself in the long-term AI chip design ecosystem at the research level.AVGO has returned 517% over three years and 1,023% over five years compared to the S&P 500’s 77% and 80%, respectively, according to Yahoo Finance.Q2 earnings report is the next test of whether the HSBC projection of $100 billion in ASIC revenue for fiscal 2027 is the kind of number that surprises the market — or the kind of number the market eventually realizes it should have seen coming.Related: Citi names Broadcom stock top semiconductor pick for 2026