Broadcom (AVGO) AI Stock Analysis

• Market Cap: $1.54T
• Dividend Yield: 0.58%
• Average Volume (3M): 30.03M
• Price to Earnings (P/E): 68.3
• Beta (1Y): 2.56
• Revenue Growth: 23.87%
• EPS Growth: 285.84%
• Country: US
• Employees: 37,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 1.95
• Shares Outstanding: 4,722,365,000
• 10 Day Avg. Volume: 46,564,019
• 30 Day Avg. Volume: 30,025,110
• PEG Ratio: 0.26
• Price to Book (P/B): 21.01
• Price to Sales (P/S): 26.74
• P/FCF Ratio: 63.47
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 27.62
• Enterprise Value/Gross Profit: 40.76
• Enterprise Value/Ebitda: 51.56
• 1Y Price Target: $455.63
• Price Target Upside: 38.12% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 29
• EPS Forecast (FY): 10.05
• Revenue Forecast (FY): $95.43B

• Rating: 76 Outperform
• Price Target: $407.00 ▲(23.38% Upside)

Broadcom's overall stock score reflects its strong financial performance and positive earnings call sentiment, driven by growth in AI semiconductors and infrastructure software. While the technical analysis shows mixed signals, the company's strategic focus on AI and robust cash generation support a positive outlook. The high P/E ratio indicates a premium valuation, which may pose a risk if growth expectations are not met.

Positive Factors

AI Semiconductor Growth

The significant growth in AI semiconductor revenue highlights Broadcom's strong position in a rapidly expanding market, providing a durable competitive advantage and potential for sustained revenue growth.

Infrastructure Software Expansion

The robust growth in infrastructure software indicates a successful diversification strategy, enhancing Broadcom's revenue streams and reducing dependency on semiconductor sales alone.

Strong Cash Flow

Broadcom's strong cash flow generation supports financial flexibility, enabling strategic investments and shareholder returns, which are crucial for long-term business sustainability.

Negative Factors

Non-AI Semiconductor Revenue Stagnation

Stagnant non-AI semiconductor revenue suggests potential challenges in maintaining growth in traditional markets, which could impact overall revenue stability if not addressed.

Operating Expense Increase

Rising operating expenses, particularly in R&D, may pressure margins and profitability, necessitating careful management to ensure sustainable financial performance.

Gross Margin Pressure

Pressure on gross margins from a shift towards lower-margin AI products could affect profitability, requiring strategic pricing and cost management to maintain financial health.

Broadcom Business Overview & Revenue Model

Company Description

Broadcom Inc. (AVGO) is a global technology company that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions. The company operates in two main segments: Semiconductor Solutions, which includes products for networking, broadband, enterprise storage, and wireless communications; and Infrastructure Software, which encompasses software solutions for data centers, security, and enterprise applications. Broadcom's core products include chips for Ethernet networking, fiber optic communication, and various consumer electronics.

How the Company Makes Money

Broadcom generates revenue primarily through the sale of semiconductor products, which account for the majority of its income. The company sells a wide array of chips used in various applications, including wireless communication, data center networking, and broadband access. Additionally, Broadcom's Infrastructure Software segment contributes significantly to its revenue through licensing and subscription fees for software solutions. The company also engages in strategic partnerships and acquisitions to enhance its product offerings and market reach, which further contributes to its earnings. Notably, Broadcom's relationships with major technology companies and manufacturers enable it to secure long-term contracts and maintain a steady revenue stream.

Broadcom Financial Statement Overview

Summary

Broadcom's financial statements reflect a strong financial position with impressive profitability, efficient operations, and robust cash generation. The company has shown consistent revenue and profit growth, supported by a solid balance sheet with improved leverage. While the debt level remains significant, it is well-managed, and the company's cash flow generation provides a cushion for financial flexibility.

Income Statement

Broadcom's income statement shows strong profitability with a TTM gross profit margin of 67.77% and a net profit margin of 36.20%. The company has demonstrated consistent revenue growth, with a notable 6.61% increase in the TTM period. EBIT and EBITDA margins are robust at 28.24% and 50.07%, respectively, indicating efficient operations. Overall, Broadcom's income statement reflects a healthy financial performance with strong growth and profitability metrics.

Balance Sheet

The balance sheet reveals a solid equity position with a debt-to-equity ratio of 0.80 in the TTM period, showing improved leverage compared to previous years. Return on equity is impressive at 27.01%, indicating effective use of shareholder funds. The equity ratio stands at 47.53%, reflecting a balanced capital structure. While leverage has decreased, the company still maintains a significant level of debt, which could pose risks if not managed carefully.

Cash Flow

Broadcom's cash flow statement highlights strong cash generation capabilities, with a TTM free cash flow growth rate of 7.96%. The operating cash flow to net income ratio is 1.49, indicating efficient cash conversion. The free cash flow to net income ratio is high at 97.74%, demonstrating the company's ability to generate cash relative to its net income. Overall, the cash flow metrics suggest robust cash management and liquidity.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	63.89B	51.57B	35.82B	33.20B	27.45B
Gross Profit	43.29B	32.51B	24.69B	22.09B	16.84B
EBITDA	35.49B	23.88B	20.55B	19.16B	14.69B
Net Income	23.13B	5.89B	14.08B	11.49B	6.74B
Balance Sheet
Total Assets	171.09B	165.65B	72.86B	73.25B	75.57B
Cash, Cash Equivalents and Short-Term Investments	16.18B	9.35B	14.19B	12.42B	12.16B
Total Debt	65.14B	67.57B	39.65B	39.98B	40.27B
Total Liabilities	89.80B	97.97B	48.87B	50.54B	50.58B
Stockholders Equity	81.29B	67.68B	23.99B	22.71B	24.99B
Cash Flow
Free Cash Flow	26.91B	19.41B	17.63B	16.31B	13.32B
Operating Cash Flow	27.54B	19.96B	18.09B	16.74B	13.76B
Investing Cash Flow	-580.00M	-23.07B	-689.00M	-667.00M	-245.00M
Financing Cash Flow	-20.13B	-1.73B	-15.62B	-15.82B	-8.97B

Broadcom Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 329.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVGO, the sentiment is Negative. The current price of 329.88 is below the 20-day moving average (MA) of 374.69, below the 50-day MA of 361.62, and above the 200-day MA of 282.32, indicating a neutral trend. The MACD of -4.63 indicates Positive momentum. The RSI at 36.87 is Neutral, neither overbought nor oversold. The STOCH value of 7.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AVGO.

Broadcom Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QCOM	80 Outperform	$184.58B	34.37	23.34%	2.02%	13.66%	-45.40%
AVGO	76 Outperform	$1.54T	68.35	31.05%	0.58%	23.87%	285.84%
MRVL	76 Outperform	$69.29B	28.61	18.04%	0.28%	44.95%	―
MU	76 Outperform	$253.79B	21.44	22.55%	0.20%	45.43%	203.31%
AMD	73 Outperform	$322.53B	99.37	5.32%	―	31.83%	80.45%
INTC	64 Neutral	$171.96B	3,422.64	0.19%	―	-1.49%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Broadcom Corporate Events

Broadcom Reports Strong Q4 2025 Financial Results

On December 11, 2025, Broadcom Inc. announced its financial results for the fourth quarter and fiscal year 2025, reporting a 28% increase in revenue to $18.015 billion, driven by a significant rise in AI semiconductor revenue. The company also declared a quarterly cash dividend of $0.65 per share, marking a 10% increase from the previous quarter, and provided a revenue guidance of $19.1 billion for the first quarter of fiscal year 2026.

Broadcom Issues $5 Billion in Senior Notes

On September 22, 2025, Broadcom Inc. entered into an underwriting agreement to issue and sell $5 billion in senior notes, with varying maturity dates in 2030, 2036, and 2038. This move is part of Broadcom’s strategic financial management, as the company plans to redeem outstanding notes totaling approximately $3.6 billion, which are due in 2027, to optimize its debt structure and potentially reduce interest expenses.