BMO Initiates Coverage of Broadcom with Outperform Rating Amid AI Growth
On August 21, 2026, BMO Capital Markets initiated coverage on Broadcom (AVGO) with an 'Outperform' rating and a $455 price target. Analyst Harsh Kumar highlighted the company's leadership in custom ASICs for AI applications and its strong position as the second-largest AI chip provider behind Nvidia. With shares trading near $368, this implies over 25% potential upside within a year. Kumar emphasized Broadcom’s dual strengths: designing high-performance chips tailored to major tech firms like Google and OpenAI, and providing essential networking infrastructure for large-scale AI clusters. These capabilities create barriers for competitors and support strong demand through fiscal 2027. The firm also noted that Broadcom is in talks to raise over $60 billion via debt financing—potentially expanding to $100 billion—to fund chip production for clients like Anthropic. The timing of BMO’s call, just before Broadcom's September 2 earnings report, adds weight as it counters concerns about customers developing their own chips. Instead, Google and others are increasing spending on AI infrastructure, which supports continued demand for Broadcom products.
Topics: AI chips analyst rating BMO Capital Markets Broadcom