By Kit Norton

Shares of Broadcom have taken a hit this month but analysts at J.P. Morgan believe the market continues to underestimate the semiconductor company and that the firm would be "aggressive buyers at current levels."

Broadcom stock rose 2.2% to $385.60 in premarket trading on Wednesday after dropping 4.4% to $376.71 on Tuesday. The semiconductor and software has fallen 14% in June after the company's so-so guidance at the beginning of the month sparked a selloff in chip and artificial-intelligence stocks.

While Broadcom stock has retreated 20% from its record closing high of $481.57 from June 2, shares remain up 11% this year and have gained 53% over the past 12 months, according to Dow Jones Market Data.

Given the recent decline, J.P. Morgan analysts Harlan Sur and Mayur Ramdhani wrote they would be buying Broadcom stock.

The analysts reiterated their Overweight rating on the shares with a $580 price target, which represents 54% upside from the closing price on Tuesday.

Sur wrote that J.P. Morgan "would be aggressive buyers at current levels" as the company continues to have "significant dominance" in advanced chip packaging design, cadence of new designs, its intellectual property portfolio, and a track record of execution. As an example, the firm noted that Broadcom has helped Alphabet's Google bring to market 14 of its most advanced chip designs over the past 12 years.

Part of the investor concern around Broadcom has been based on comments from CEO Hock Tan that major custom-chip client Google likely was to diversify its supply chain and that the growth of its semiconductor business would dilute its gross margin.

The Alphabet partnership is a decade old, and the companies have now developed eight generations of Google's Tensor Processing Unit, or TPU, chips.

J.P. Morgan believes that "contrary to the recent noise from sell-siders, " Broadcom and Google haven't delayed or canceled the next-generation Google TPU program and that the Broadcom team remains on track to ramp up production.

Broadcom has been benefiting from the AI data center boom throughout the year. While Nvidia still leads in AI computing chips, Broadcom designs custom alternatives for six customers, including Alphabet and OpenAI.

Broadcom also long been a leader in networking chips, another major contributor to its AI data-center business. The company is targeting $100 billion for AI chip sales in 2027.

Overall, Wall Street remains highly bullish on Broadcom stock. Of the 55 firms polled by FactSet, 51 rate the stock at Buy and with a $523.67 average price target.

Write to Kit Norton at kit.norton@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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June 17, 2026 08:55 ET (12:55 GMT)

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