One of Wall Street‘s most closely watched semiconductor analysts just moved his price target ahead of an earnings report that could define how the AI chip trade is valued for the rest of the summer.
The note he published does more than raise a number. It lays out a specific projection for one company’s AI revenue through 2028 that most investors are not yet working with.
Citi raises Broadcom target ahead of Q2 fiscal 2026 earnings
Citi analyst Atif Malik raised his price target on Broadcom to $500 from $475 on May 12, maintaining a buy rating as part of an earnings preview note, TipRanks reported. The raise came alongside Citi explicitly designating Broadcom as its top semiconductor pick for 2026, according to Investing.com.
The $500 target is based on 20 times Citi’s fiscal 2028 EPS estimate of $25, rolling forward from the prior fiscal 2027 base to reflect what Malik described as increased earnings visibility. Broadcom reports fiscal second-quarter earnings on June 3, covering the April quarter. Malik models both the April-quarter and July-quarter sales and EPS modestly above consensus, driven by stronger AI demand, Investing.com confirmed.
Citi’s AI revenue forecast for Broadcom through 2028
The most substantive part of Citi’s note is its multi-year AI revenue projection for Broadcom.
The bank estimates that AI revenue will grow from approximately 49% of total sales currently to approximately 81% by fiscal fourth quarter 2028, according to Investing.com.
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The specific customer math behind that projection is striking. Citi projects combined Google and Anthropic AI sales to reach approximately $80 billion, with total AI sales hitting $115 billion in 2027 and rising to $180 billion in 2028, Investing.com noted. Those figures reflect the scale of custom silicon and networking revenue Broadcom is expected to generate as hyperscaler AI infrastructure buildouts continue at pace.
Broadcom’s AI backlog currently stands at a record $73 billion, according to Morningstar. That level of contracted future demand is what gives Citi the earnings visibility it cited as the primary reason for raising the target.
Why Broadcom’s AI story is different from Nvidia’s
Broadcom occupies a distinct position in the AI infrastructure stack. While Nvidia dominates AI accelerators for model training and general inference, Broadcom is the primary supplier of custom AI accelerators for specific hyperscaler workloads, including Google’s tensor processing units.
It also supplies the high-speed networking interconnects that move data between AI chips at scale, including its Tomahawk and Jericho switch chips, which are essential in every major AI data center.
That combination of custom silicon and networking gives Broadcom leverage across two separate parts of the AI infrastructure budget. Google has a multi-year long-term agreement with Broadcom, and Malik cited this as evidence it would be “difficult for the competition to catch up technologically.”
Broadcom is also engaged with three additional customers on custom AI chip development beyond its current named roster of Google, Meta, Anthropic, and OpenAI, Investing.com confirmed.
Broadcom’s customer base and Citi’s pushback on the bear case
Citi’s note addresses two common concerns about Broadcom directly. On customer concentration, Malik noted the company currently serves Google, Meta, Anthropic, and OpenAI as named AI customers plus two unnamed clients, with three more in the pipeline.
On enterprise software fears, Citi called them “overblown,” describing the segment as “very sticky,” given deep integration across large enterprise clients, according to Investing.com.
Broadcom’s last earnings report delivered fiscal Q2 2026 revenue guidance of $22 billion, representing approximately 47% year-over-year growth, according to Morningstar. The June 3 report will show whether Broadcom delivered on that guidance and what the trajectory looks like for the July quarter and full fiscal year.
Citi’s positioning ahead of the print is clearly optimistic. Modeling both the near and forward quarters above consensus indicates that Malik believes the current AI demand environment is strong enough to produce a beat-and-raise outcome. That would support the $500 target and potentially push the stock toward Evercore’s more aggressive $582 price target, which represents the highest on the Street, Stock Analysis noted.
Key figures from Citi’s Broadcom note dated May 12, 2026:
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Citi new price target: $500, raised from $475, Buy rating maintained, analyst Atif Malik, May 12, according to TipRanks
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Citi designation: Top semiconductor pick for 2026, Investing.com noted
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AI revenue as share of total sales: Approximately 49% currently, projected to reach 81% by fiscal Q4 2028, Investing.com confirmed
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Total AI sales projections: $115 billion in fiscal 2027, $180 billion in fiscal 2028, Investing.com noted
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Google and Anthropic AI sales combined projection: Approximately $80 billion, Investing.com confirmed
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Broadcom AI backlog: Record $73 billion, according to Morningstar
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Fiscal Q2 2026 earnings date: June 3; prior guidance: $22 billion revenue, approximately 47% year-over-year growth, Morningstar confirmed
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Other analyst targets: Evercore $582 (highest), Rosenblatt $500, RBC $360, according to Stock Analysis
What Citi’s Broadcom call means for investors ahead of June 3
A target raise to $500 from $475 is measured rather than dramatic. What matters more is the context: Citi’s top pick designation for 2026, the AI revenue trajectory through 2028, above-consensus modeling for the next two quarters, and explicit pushback on the two biggest bear case arguments.
For investors, Broadcom’s June 3 report is the near-term test. If the company delivers $22 billion in Q2 revenue and raises guidance, Citi’s optimism will look well-placed. The broader signal from this note is that Broadcom’s AI story is still early relative to where the bank sees it by 2028. Whether June 3 moves that realization forward is what the market will be watching.
Related: Goldman Sachs resets Broadcom stock forecast
This story was originally published by TheStreet on May 13, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: finance.yahoo.com
