Broadcom (AVGO) shares closed down 5% on Friday after the chipmaker reported a strong fiscal Q2 but issued in-line guidance only for its current financial quarter.

However, analysts recommend buying AVGO shares on the post-earnings dip since the company’s release indicated continued momentum in its artificial intelligence offerings. 

Despite today’s decline, Broadcom stock is up more than 70% versus its year-to-date low.

Buy Broadcom Stock as AI Is Getting Stronger

Broadcom guided for $5.1 billion in AI revenue for its current quarter – which translates to a much better-than-expected 60% increase on a year-over-year basis. 

According to Melius Research analysts, investors should load up on AVGO stock on any dip as “AI is strong and getting stronger due to incremental opportunities in networking and inferencing.”

Melius expects sustained momentum in the company’s top line as more of its software customers switch to “higher-value” VMware subscriptions.  

Plus, the firm has confidence in Broadcom’s ability to sign at least four more AI customers that it believes will contribute rather significantly to its revenue between 2027 and 2030. 

A dividend yield of 0.95% tied to Broadcom stock makes up for another good reason to have it in your investment portfolio. 

AVGO Shares Look Headed for $290

What’s also worth mentioning is that AVGO doesn’t expect its artificial intelligence revenue to grow at an accelerated pace in the near-term only. 

In fact, the chipmaker forecasts similar growth rate (60% year-on-year) for this year as a whole – and for 2026 as well, which TD Cowen dubbed a “strong signal of confidence in Broadcom’s AI networking and XPU franchises” in a research note today. 

On Friday, the investment firm raised its price objective on the semiconductor stock to $290 that indicates potential upside of another 18% from current levels. 

Wall Street Rates Broadcom at ‘Strong Buy’

Other Wall Street analysts are not as bullish on AVGO shares primarily because they’ve already had a huge run over the past two months. 

The consensus rating on Broadcom stock currently sits at “Strong Buy” with the mean target of about $253 indicating potential upside of 3% only.