Can Investors Trust Broadcom’s Bullish 2028 Guidance?

On the Sept. 24, 2026, bonus episode of The Morning Filter podcast, co-host Dave Sekera sits down with senior analyst William Kerwin to discuss what the market is missing about Broadcom AVGO. Here is an excerpt from the show.

What the Market Is Missing About Broadcom

David Sekera: What’s the market pricing in, or what is the market missing? If I look at the multiple it’s trading at on our 2027 earnings estimate, that seems somewhat reasonable, but then there’s such huge growth in 2028 that the multiple looks really attractive at that level. Is it just a matter of the market’s just not giving them credit for any growth past 2027? And if so, when would you expect that the market would be able to get enough confidence in that growth in 2028 to start rerating that stock higher?

Will Kerwin: I think there are two key debates about the stock right now. One you’ve already referenced, which is this multisourcing dynamic in Google GOOGL. We’ve seen a lot of reports, and I would say a lot of rumors around what the share shift is going to look like now that MediaTek 2454 has qualified as a secondary supplier to Google. Even as recently as two months ago, there were reports that Google was kind of going to split into these two different XPU lines. One would be extremely high volume and high complexity. One would be lower volume, and that MediaTek won the higher-volume one, and that Broadcom was going to go from almost a dominant share in Google to a minority share. That has not happened. Broadcom affirmed, with Google’s approval, that they’re in the high-volume, high-complexity chip on their last earnings call. We think that’s been debunked, but there’s still some pessimism in the market that MediaTek is going to eat away at the share there and Broadcom will be worse off for it.

I think the other one, and maybe the more important one at this point, is fears about the durability of AI growth. I think the market has adjusted to expecting pretty high growth in 2027, and we don’t think our capex expectations above a trillion are really anywhere outside of consensus at this point. But I think when you think about 2028 and an acceleration off of 2027, which is already kind of mind-blowingly high, the doubling again from Broadcom, I think the market is pricing in a good amount of skepticism there.

And then as you get even longer term, which we like to think about at Morningstar, I think the market is kind of pricing in a significant amount of uncertainty that this AI growth can endure at these levels and not go down after ’27 or after ’28. And so, we talked about our levels of confidence, the improving monetization of AI models, the supply constraints that are bringing some rationality into this buildout. It gives us confidence that through 2030, we think growth can continue, but I think the market is pricing in a significant amount of doubt into that confidence.

Will Broadcom Be Able to Meet Bullish 2028 Guidance?

Sekera: When would you think that the market would start getting that kind of clarity? When you think about what Broadcom does, the suppliers that they have to work with—whether it’s like Taiwan Semi TSM in order to be able to get the type of machinery that they need there to build these types of chips—how long is that product cycle? Would it be maybe first quarter, second quarter of 2027 that they’ll actually be working with their suppliers to build out what their production is going to be in 2028? Is that the type of time frame that we’re looking at, and maybe that’s when the market starts getting that better clarity that yes, they will be able to hit these numbers that they’ve guided to for 2028?

Kerwin: I think it comes down to printing the numbers that they’ve guided to because if they hit their ’28 numbers, we don’t see that being priced in today nearly enough. Now, I think there are a couple of hard catalysts we could look toward. One is when earnings for Q4 get reported toward the end of January in 2027; we expect all of those large AI spenders to guide to capex for 2027.

Now, we expect that number to be above one trillion. We think that’s largely in consensus, but I think once that number actually gets vocalized and printed, that could be a hard catalyst for suppliers like an Nvidia NVDA, like a Broadcom, that this spending is real and it’s happening. But I also think there could be another one in later 2027 when the market starts to bake in 2028 expectations. And if the growth rates continue to be high, if potentially there’s some upside even to what expectations are for 2027, then you could see that 2028 discount that we see being applied start to come away and some positive reaction from shares.

Now, I think it’s important to note on OpenAI and Anthropic—these two huge customers that we expect are going to help Broadcom diversify away from Google—even as recently as last quarter, they’re effectively 0% of sales. Broadcom has this large business that does not include these two customers. As soon as 2027, Broadcom expects Anthropic to become its largest customer and eclipse Google, which implies Anthropic being $60 billion in revenue next year from practically zero in 2026.

Sekera: And that’s not included in your model today?

Kerwin: No, that is included in our model today. But we think that they can guide to this all they want. Once you start seeing a $10 billion step-up every quarter as Anthropic builds in, and then OpenAI is a little bit more of a 2028 story, and we think they’ll be pretty rapidly coming close to Anthropic in terms of customer scale. We think those are going to be hard to ignore, but they’re not being printed yet. And so, right now it’s a lot of guidance, and do you trust management? We do. We actually put out a report in March before this guidance that we expected Anthropic to become their largest customer. We think that’s going to bear out, and we think the market is going to need to see it to believe it.

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