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Broadcom
(NASDAQ:AVGO)
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Rating:76Outperform
Price Target:
$407.00
▲(0.11% Upside)
Action:Reiterated
Date:07/06/26
The score is driven primarily by exceptional profitability and free-cash-flow strength, reinforced by highly bullish AI-led guidance and large multi-year bookings/commitments. Offsetting factors are weak technical momentum (bearish trend indicators) and a rich valuation (high P/E with a low dividend yield).
Positive Factors
Free Cash Flow Strength
Consistently massive free cash flow (TTM ~$32.8B and ~97% conversion of net income) provides durable financing flexibility for capex-light semiconductor scaling, R&D, dividends, buybacks, and selective debt paydowns, supporting strategic investments over the next several years.
Negative Factors
Large Absolute Debt Load
A sizable absolute debt stock (~$64.9B) leaves the company exposed to higher interest costs and constrains flexibility if free cash flow weakens; while leverage is manageable vs equity, large maturities and refinancing needs remain a multi‑quarter structural consideration.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Strength
Consistently massive free cash flow (TTM ~$32.8B and ~97% conversion of net income) provides durable financing flexibility for capex-light semiconductor scaling, R&D, dividends, buybacks, and selective debt paydowns, supporting strategic investments over the next several years.
Read all positive factors
Broadcom Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue across different business units, highlighting which segments drive growth and profitability, and indicating strategic focus areas.
Analyzes revenue across different business units, highlighting which segments drive growth and profitability, and indicating strategic focus areas.
Data provided by:
The Fly
The FlyBroadcom (AVGO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.85T
Dividend Yield0.69%
Average Volume (3M)31.73M
Price to Earnings (P/E)62.8
Beta (1Y)2.43
Revenue Growth32.29%
EPS Growth125.17%
CountryUS
Employees37,000
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)6.19
Shares Outstanding4,757,580,000
10 Day Avg. Volume23,989,918
30 Day Avg. Volume31,733,701
Financial Highlights & Ratios
PEG Ratio0.26
Price to Book (P/B)21.01
Price to Sales (P/S)26.74
P/FCF Ratio63.47
Enterprise Value/Market Cap1.04
Enterprise Value/Revenue25.37
Enterprise Value/Gross Profit37.89
Enterprise Value/Ebitda45.56
Forecast
1Y Price Target
$514.05Price Target Upside26.44% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering26
EPS Forecast (FY)11.57
Revenue Forecast (FY)$105.41B
Broadcom Business Overview & Revenue Model
Company Description
Broadcom Inc. is a prominent global technology enterprise focused on the innovation, development, and supply of advanced semiconductor solutions and critical infrastructure software. The company's headquarters are situated in San Jose, California,...
How the Company Makes Money
Broadcom makes money primarily by selling (1) semiconductor products and (2) infrastructure software. Semiconductor revenue is generated from shipping chips and related solutions to OEMs and hyperscale/cloud customers, with major demand drivers ti...
Broadcom Earnings Call Summary
Earnings Call Date:Jun 03, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Sep 03, 2026
Earnings Call Sentiment Positive
The call communicated exceptionally strong operational and financial performance driven by record revenue, margins, free cash flow, and massive AI semiconductor growth and bookings. Strategic multi‑year customer commitments, multi‑gigawatt deployment plans, and technology leadership underpin a highly positive outlook. The primary near‑term headwinds are mix‑driven gross margin compression, elevated inventory and working capital as the company secures supply, and concentration of growth in AI (with non‑AI semiconductors growing modestly). Overall, the positives substantially outweigh the risks.Positive Updates
Record Consolidated Revenue and Strong YoY Growth
Consolidated revenue was a record $22.2 billion in Q2, up 48% year‑over‑year; Q3 consolidated revenue guidance of $29.4 billion implies +84% year‑over‑year growth.
Negative Updates
Gross Margin Compression from Mix
Consolidated gross margin declined to 77.1% in Q2 (down ~32 basis points YoY) and is guided down further to ~74% in Q3 due to rapid AI semiconductor mix growth versus higher‑margin software; management attributes this to mix rather than structural semiconductor margin deterioration.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Consolidated Revenue and Strong YoY Growth
Consolidated revenue was a record $22.2 billion in Q2, up 48% year‑over‑year; Q3 consolidated revenue guidance of $29.4 billion implies +84% year‑over‑year growth.
Read all positive updates
Company Guidance
Broadcom guided Q3 fiscal 2026 consolidated revenue of $29.4 billion (up 84% YoY), with semiconductor revenue of approximately $20.5 billion (up 124% YoY) that includes AI semiconductor revenue of $16 billion (up >200% YoY) and non‑AI semiconductor revenue of about $4.5 billion (up ~12% YoY), infrastructure software revenue of roughly $8.9 billion (up 31% YoY), a consolidated gross margin near 74%, operating margin around 67%, adjusted EBITDA about 68% of revenue, a non‑GAAP tax rate of ~16% (Q3 and FY26), and an estimated non‑GAAP diluted share count of ~4.94 billion; management also reiterated FY26 AI semiconductor revenue of $56 billion (≈+180% YoY) and reiterated AI semiconductor revenue in excess of $100 billion for FY27.Broadcom Financial Statement Overview
Summary
Income Statement
92
Very Positive
Balance Sheet
78
Positive
Cash Flow
94
Very Positive
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 75.47B | 63.89B | 51.57B | 35.82B | 33.20B | 27.45B |
| Gross Profit | 50.53B | 43.29B | 32.51B | 24.69B | 22.09B | 16.84B |
| EBITDA | 42.02B | 34.71B | 23.88B | 20.55B | 19.16B | 14.69B |
| Net Income | 29.32B | 23.13B | 5.89B | 14.08B | 11.49B | 6.74B |
Balance Sheet | ||||||
| Total Assets | 179.16B | 171.09B | 165.65B | 72.86B | 73.25B | 75.57B |
| Cash, Cash Equivalents and Short-Term Investments | 19.63B | 16.18B | 9.35B | 14.19B | 12.42B | 12.16B |
| Total Debt | 64.91B | 65.14B | 67.57B | 39.65B | 39.98B | 40.27B |
| Total Liabilities | 91.47B | 89.80B | 97.97B | 48.87B | 50.54B | 50.58B |
| Stockholders Equity | 87.69B | 81.29B | 67.68B | 23.99B | 22.71B | 24.99B |
Cash Flow | ||||||
| Free Cash Flow | 32.76B | 26.91B | 19.41B | 17.63B | 16.31B | 13.32B |
| Operating Cash Flow | 33.62B | 27.54B | 19.96B | 18.09B | 16.74B | 13.76B |
| Investing Cash Flow | -596.00M | -580.00M | -23.07B | -689.00M | -667.00M | -245.00M |
| Financing Cash Flow | -22.87B | -20.13B | -1.73B | -15.62B | -15.82B | -8.97B |
Broadcom Technical Analysis
Positive
406.54
Price Trends
406.29
Negative
373.38
Positive
360.65
Positive
Market Momentum
-9.03
Negative
50.25
Neutral
59.43
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 406.54 is above the 20-day moving average (MA) of 380.68, above the 50-day MA of 406.29, and above the 200-day MA of 360.65, indicating a neutral trend. The MACD of -9.03 indicates Negative momentum. The RSI at 50.25 is Neutral, neither overbought nor oversold. The STOCH value of 59.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AVGO.
Broadcom Risk Analysis
Broadcom disclosed 42 risk factors in its most recent earnings report. Broadcom reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Broadcom Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $1.07T | 21.17 | 40.84% | 0.20% | 166.98% | 701.44% | |
78 Outperform | $843.68B | 167.99 | 8.08% | ― | 34.97% | 123.87% | |
78 Outperform | $202.70B | 78.84 | 16.84% | 0.28% | 34.07% | ― | |
76 Outperform | $1.85T | 62.79 | 36.40% | 0.69% | 32.29% | 125.17% | |
70 Outperform | $196.63B | 20.00 | 40.19% | 2.01% | 5.21% | -6.72% | |
63 Neutral | $554.07B | ― | -2.95% | ― | 1.36% | 86.07% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
AVGO
Broadcom
401.11
127.71
46.71%
AMD
Advanced Micro Devices
546.72
402.56
279.25%
INTC
Intel
112.54
88.72
372.46%
MRVL
Marvell
243.27
170.11
232.51%
MU
Micron
991.64
868.73
706.79%
QCOM
Qualcomm
191.11
35.30
22.66%
Broadcom Corporate Events
Business Operations and Strategy
Broadcom, Apple Extend Multi-Year Custom Chip Partnership
Positive
Jul 6, 2026
Broadcom Inc. and Apple Inc. have expanded their long-standing technology collaboration by signing new multi-year agreements that run through 2031. Under these deals, Broadcom will develop and supply a range of custom ASIC silicon products for use...
Business Operations and StrategyPrivate Placements and Financing
Broadcom Announces $2.5 Billion Debt Tender Offer
Positive
Jun 18, 2026
On June 17, 2026, Broadcom announced pricing terms for a series of cash tender offers to repurchase up to $2.5 billion of selected outstanding senior notes, including maturities from 2030 to 2038, setting total consideration levels per $1,000 of p...
Business Operations and Strategy
Broadcom Launches $2.5 Billion Senior Notes Tender Offer
Positive
Jun 11, 2026
On June 11, 2026, Broadcom launched cash tender offers to repurchase up to $2.5 billion of several series of its outstanding senior notes maturing between 2030 and 2038, subject to a consideration cap and specified acceptance priorities. The offer...
Business Operations and StrategyDividendsFinancial Disclosures
Broadcom Posts Record Q2 Results on Surging AI Demand
Positive
Jun 3, 2026
On June 3, 2026, Broadcom reported second-quarter fiscal 2026 results for the period ended May 3, 2026, with revenue jumping 48% year-on-year to a record $22.2 billion and GAAP net income rising 88% to $9.3 billion, driven largely by surging deman...
Executive/Board ChangesShareholder Meetings
Broadcom Shareholders Back Board, Auditor and Executive Pay
Positive
Apr 21, 2026
Broadcom Inc. held its 2026 Annual Meeting of Stockholders on April 20, 2026, where shareholders elected eight directors, including CEO Hock E. Tan and co-founder Henry Samueli, to serve until the next annual meeting or until successors are chosen...
Business Operations and Strategy
Broadcom Expands Long-Term AI Infrastructure Partnership With Google
Positive
Apr 6, 2026
Broadcom has signed a long-term agreement with Google to develop and supply custom Tensor Processing Units for Google’s future TPU generations, alongside a supply assurance deal to provide networking and other components for Google’s n...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.