TD Cowen Adjusts Broadcom (AVGO) Valuation, Highlights Long-Term AI Tailwinds

Broadcom Inc. (NASDAQ:AVGO) is included among the Goldman Sachs Dividend Stocks: Top 14 Stock Picks.

On February 24, TD Cowen lowered its price recommendation on Broadcom Inc. (NASDAQ:AVGO) to $405 from $450. The firm maintained a Buy rating on the shares as part of its earnings preview. In a research note, the analyst said investment in AI infrastructure continues to rise, and expectations are still moving higher. TD Cowen expects this trend to support semiconductor estimates in 2026 and 2027. At the same time, share valuations have pulled back. The firm believes this creates an opportunity for investors. It also said it remains positive on the computing and networking segment.

Much of Broadcom’s recent growth has come from its customized application-specific integrated circuits, or ASICs, which help accelerate AI workloads. At the same time, the company expanded into infrastructure software by acquiring major businesses, including VMware. This shift helped diversify its revenue beyond the traditional semiconductor cycle. The expansion also strengthened Broadcom’s position with large data center customers. By offering both chips and software, the company created more integrated solutions. This approach helped deepen customer relationships and made its offerings harder to replace.

In fiscal 2025, which ended last November, Broadcom’s AI chip sales rose 65% to $20 billion. These sales accounted for 31% of its total revenue. Strong demand for AI chips helped offset slower performance in non-AI semiconductors and infrastructure software, which tend to move with broader economic cycles. Looking ahead, Broadcom expects AI chip revenue to reach $60 billion to $90 billion annually by fiscal 2027.

Broadcom Inc. (NASDAQ:AVGO) operates as a global technology company. It designs, develops, and supplies semiconductors, enterprise software, and security solutions. Its business runs through two main segments: semiconductor solutions and infrastructure software.