Broadcom's (AVGO) Q3 AI revenue outlook likely fell short of investor expectations, while its Q2 results were slightly ahead of consensus, RBC Capital Markets said in a Thursday note.
The report said the company's decision to reiterate and not to raise fiscal 2027 AI outlook was also a surprise, especially given the robust demand backdrop.
"We do not see any structural issues and surmise that power/data center constraints and conservatism are playing a role," the report said.
"Whatever the case, we expect the stock to remain range bound given limited near-term upside potential, premium valuation to NVDA, and lack of incremental catalysts," it added.
RBC raised its price target to $400 from $360, while reiterating its sector perform rating.
Price: $414.54, Change: $-64.70, Percent Change: -13.50%