Broadcom (AVGO) AI Stock Analysis

• Market Cap: $1.16T
• Dividend Yield: 0.91%
• Average Volume (3M): 20.67M
• Price to Earnings (P/E): 92.8
• Beta (1Y): 2.37
• Revenue Growth: 33.85%
• EPS Growth: 14.43%
• Country: US
• Employees: 37,000
• Sector: Technology
• Sector Strength: 83
• Industry: Semiconductors
• EPS (TTM): 1.58
• Shares Outstanding: 4,701,948,700
• 10 Day Avg. Volume: 25,083,529
• 30 Day Avg. Volume: 20,670,600
• PEG Ratio: 0.03
• Price to Book (P/B): 11.38
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 38.35
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $289.60
• Price Target Upside: 17.28% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 29

• Rating: 80 Outperform
• Price Target: $284.00 ▲(15.01%Upside)

Broadcom's strong financial performance and positive earnings call sentiment are key drivers of the overall score. Robust growth in AI sectors and efficient cash management bolster the company's outlook. However, the high valuation and challenges in non-AI segments slightly temper the score.

Positive Factors

AI Growth

AVGO's 58-60% YoY AI growth target for FY26 is well above the 40-45% YoY from cons., and strongly addresses perceived competitive risks.

Product Innovation

Broadcom announced its next-gen Tomahawk 6 switch, which is seeing tremendous demand, indicating strong product innovation and market interest.

Revenue Growth

The company is forecasting AI revenue to grow to $5.1B, better than prior estimates, indicating strong future growth potential.

Negative Factors

Acquisition Risks

Key risks include the risk of non-accretive acquisitions, relatively high leverage, and a potential slowdown in AI growth momentum.

Customer Concentration Risks

Custom chip programs by nature tend to be lumpy with high customer concentration risks, as seen with AVGO & Google.

Profit Margin Pressure

GMs were quite strong in the quarter at 79.4% but guided 130 bps lower as mix to AI and further into ASICs hurts mix, which should be a LT headwind.

Broadcom Business Overview & Revenue Model

Company Description

Broadcom Inc. (AVGO) is a global technology leader that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions. The company's core products and services span across various sectors including data center, networking, software, broadband, wireless, and industrial markets. Broadcom's portfolio includes products like semiconductors for networking and storage, mainframe and enterprise software, and cybersecurity solutions.

How the Company Makes Money

Broadcom Inc. makes money primarily through the sale of its semiconductor products and infrastructure software solutions. The company generates revenue through two main segments: Semiconductor Solutions and Infrastructure Software. The Semiconductor Solutions segment involves the design and sale of semiconductor devices, which are used in applications like data center networking, broadband access, and wireless communications. The Infrastructure Software segment includes revenue from the licensing and support of software for mainframe, cybersecurity, and enterprise automation. Broadcom's earnings are bolstered by its strategic partnerships with leading technology companies and its continuous investment in research and development to innovate and expand its product offerings.

Broadcom Financial Statement Overview

Summary

Broadcom's financial health is robust, driven by strong revenue growth, high profitability margins, and efficient cash management. The company's strategic investments and operational efficiencies are evident, although there are opportunities to enhance asset utilization and reduce leverage for even more stability. Overall, Broadcom is well-positioned within the semiconductor industry, with sound financials supporting its growth trajectory.

Income Statement

Broadcom has demonstrated strong financial performance with a substantial Gross Profit Margin of 63.3% and a robust Net Profit Margin of 18.5% for TTM (Trailing-Twelve-Months). Revenue Growth Rate is impressive at 5.7% year-over-year, reflecting a positive trajectory in sales. The EBIT Margin stands at 33.0%, and the EBITDA Margin at 46.7%, showcasing excellent operational efficiency. The consistent revenue and profit growth underlines solid market positioning.

Balance Sheet

The company's balance sheet reflects a moderate Debt-to-Equity Ratio of 0.95, indicating a balanced approach to leveraging debt. Return on Equity is robust at 14.4%, suggesting effective utilization of equity capital. However, the Equity Ratio of 42.2% signifies a relatively high level of liabilities compared to assets. The stability is notable, but there's room to optimize asset utilization and decrease leverage.

Cash Flow

Broadcom's cash flow situation is strong, with a Free Cash Flow to Net Income Ratio of 2.06, indicating high cash generation relative to reported profits. The Operating Cash Flow to Net Income Ratio is 2.11, demonstrating reliable cash conversion from operations. Free Cash Flow Growth Rate over the past year is notable at 6.8%, showcasing efficient capital expenditure and cash management strategies.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
54.53B	51.57B	35.82B	33.20B	27.45B	23.89B
	Gross Profit
34.51B	32.51B	24.69B	22.09B	16.84B	13.52B
	EBIT
17.98B	13.46B	16.21B	14.22B	8.52B	4.01B
	EBITDA
25.47B	23.72B	20.55B	19.16B	14.69B	11.13B
	Net Income Common Stockholders
10.07B	5.89B	14.08B	11.49B	6.74B	2.96B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
561.00M	9.35B	14.19B	12.42B	12.16B	7.62B
	Total Assets
2.16B	165.65B	72.86B	73.25B	75.57B	75.93B
	Total Debt
236.00M	67.57B	39.23B	39.52B	39.73B	41.06B
	Net Debt
-325.00M	58.22B	25.04B	27.10B	27.57B	33.44B
	Total Liabilities
652.00M	97.97B	48.87B	50.54B	50.58B	52.03B
	Stockholders Equity
1.50B	67.68B	23.99B	22.71B	24.99B	23.90B
Cash Flow		Free Cash Flow
20.73B	19.41B	17.63B	16.31B	13.32B	11.60B
	Operating Cash Flow
21.26B	19.96B	18.09B	16.74B	13.76B	12.06B
	Investing Cash Flow
2.23B	-23.07B	-689.00M	-667.00M	-245.00M	-11.11B
	Financing Cash Flow
-26.05B	-1.73B	-15.62B	-15.82B	-8.97B	1.61B

Broadcom Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 246.93
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVGO, the sentiment is Positive. The current price of 246.93 is above the 20-day moving average (MA) of 238.78, above the 50-day MA of 203.95, and above the 200-day MA of 194.03, indicating a bullish trend. The MACD of 13.08 indicates Positive momentum. The RSI at 61.74 is Neutral, neither overbought nor oversold. The STOCH value of 54.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AVGO.

Broadcom Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AMD	81 Outperform	$188.39B	85.17	3.90%	―	21.71%	99.00%
QCOM	81 Outperform	$163.87B	15.20	42.21%	2.28%	16.15%	32.28%
AVGO	80 Outperform	$1.16T	92.78	18.98%	0.91%	33.85%	14.43%
ASML	78 Outperform	$295.43B	31.71	55.21%	0.78%	16.46%	21.29%
TXN	74 Outperform	$174.81B	36.46	29.04%	2.79%	-4.48%	-17.82%
Sector *	62 Neutral	$11.81B	10.34	-7.44%	2.91%	7.41%	-7.93%
INTC	45 Neutral	$87.50B	―	-18.66%	2.49%	-3.97%	-562.40%

Broadcom Corporate Events

Broadcom Reports Strong Q2 2025 Financial Results

On June 5, 2025, Broadcom Inc. announced its financial results for the second quarter of fiscal year 2025, reporting a 20% year-over-year increase in revenue to $15 billion. The company also declared a quarterly cash dividend of $0.59 per share, payable on June 30, 2025. Broadcom’s AI semiconductor solutions showed significant growth, contributing to the record revenue, and the company provided optimistic guidance for the third quarter, expecting further growth in AI semiconductor revenue.

The most recent analyst rating on (AVGO) stock is a Buy with a $190.00 price target. To see the full list of analyst forecasts on Broadcom stock, see the AVGO Stock Forecast page.