Broadcom (AVGO) AI Stock Analysis

• Market Cap: $1.74T
• Dividend Yield: 0.64%
• Average Volume (3M): 21.79M
• Price to Earnings (P/E): 94.4
• Beta (1Y): 2.36
• Revenue Growth: 28.01%
• EPS Growth: 235.66%
• Country: US
• Employees: 37,000
• Sector: Technology
• Sector Strength: 86
• Industry: Semiconductors
• EPS (TTM): 1.69
• Shares Outstanding: 4,703,471,000
• 10 Day Avg. Volume: 29,834,041
• 30 Day Avg. Volume: 21,792,746
• PEG Ratio: -2.11
• Price to Book (P/B): 11.52
• Price to Sales (P/S): 15.11
• P/FCF Ratio: 40.15
• Enterprise Value/Market Cap: 0.84
• Enterprise Value/Revenue: 24.30
• Enterprise Value/Gross Profit: 36.36
• Enterprise Value/Ebitda: 45.84
• 1Y Price Target: $377.58
• Price Target Upside: 4.99% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 28

• Rating: 77 Outperform
• Price Target: $419.00 ▲(16.51% Upside)

Broadcom's strong financial performance and positive earnings call guidance are the most significant factors driving the score. The company's strategic focus on AI semiconductors and infrastructure software positions it well for future growth. However, the high P/E ratio suggests overvaluation, and technical indicators point to potential overbought conditions, which moderate the overall score.

Positive Factors

AI Semiconductor Growth

Broadcom's strong growth in AI semiconductors positions it well in a rapidly expanding market, enhancing its competitive edge and future revenue potential.

Strong Cash Generation

Efficient cash generation supports Broadcom's ability to invest in growth initiatives and maintain financial stability, underpinning long-term business health.

CEO Leadership Extension

The extension of CEO Hock Tan's tenure ensures leadership continuity, critical for executing Broadcom's strategic initiatives and navigating industry changes.

Negative Factors

Non-AI Semiconductor Demand

Weak demand in non-AI segments may hinder Broadcom's overall growth, as these areas struggle to rebound, impacting revenue diversification.

Gross Margin Pressure

Margin pressures from product mix changes could affect profitability, challenging Broadcom's ability to maintain its historically strong margins.

Debt Management

While leverage is manageable, reducing debt further would enhance financial flexibility and reduce interest burden, supporting long-term stability.

Broadcom Business Overview & Revenue Model

Company Description

Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing merchant silicon products; embedded processors and controllers; serializer/deserializer application specific integrated circuits; optical and copper, and physical layers; and fiber optic transmitter and receiver components. The company also offers RF front end modules, filters, and power amplifiers; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; custom touch controllers; serial attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express switches; fiber channel host bus adapters; read channel based SoCs; custom flash controllers; preamplifiers; and optocouplers, industrial fiber optics, and motion control encoders and subsystems. Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was incorporated in 2018 and is headquartered in San Jose, California.

How the Company Makes Money

Broadcom generates revenue primarily through the sale of its semiconductor products and infrastructure software solutions. Its revenue model is diversified, with significant contributions from various segments, including networking, broadband, enterprise storage, and wireless communication. Key revenue streams include the sale of ASICs (Application-Specific Integrated Circuits), optical sensors, and Wi-Fi chips, along with software licensing and support services. Additionally, Broadcom benefits from strategic partnerships with major technology firms and telecom companies, which help to secure long-term contracts and enhance its market presence. The company's robust R&D investments also enable the continuous development of innovative products, further driving its earnings growth.

Broadcom Financial Statement Overview

Summary

Broadcom exhibits a strong financial profile with robust profitability, efficient operations, and healthy cash generation. The income statement reflects strong profitability with a net profit margin of 31.59% and revenue growth of 5.05%. The balance sheet is healthy with a manageable debt-to-equity ratio of 0.88, though further debt reduction could enhance stability. Cash flow is strong, with a free cash flow growth rate of 9.84%.

Income Statement

Broadcom's income statement reflects strong profitability and growth. The TTM gross profit margin of 66.83% and net profit margin of 31.59% indicate robust profitability. Revenue growth rate of 5.05% in the TTM suggests steady expansion, supported by a solid EBIT margin of 38.28% and EBITDA margin of 53.39%. These metrics highlight Broadcom's efficient operations and competitive positioning in the semiconductor industry.

Balance Sheet

The balance sheet shows a healthy financial structure with a debt-to-equity ratio of 0.88 in the TTM, indicating manageable leverage. Return on equity (ROE) of 27.01% demonstrates effective use of equity to generate profits. The equity ratio of 44.24% suggests a balanced capital structure, though there is room for improvement in reducing debt levels further.

Cash Flow

Broadcom's cash flow statement is strong, with a free cash flow growth rate of 9.84% in the TTM, indicating healthy cash generation. The operating cash flow to net income ratio of 1.52 and free cash flow to net income ratio of 0.98 reflect efficient cash conversion and strong operational performance. These metrics underscore Broadcom's ability to sustain operations and fund growth initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	59.93B	51.57B	35.82B	33.20B	27.45B	23.89B
Gross Profit	40.05B	32.51B	24.69B	22.09B	16.84B	13.52B
EBITDA	31.77B	23.88B	20.55B	19.16B	14.69B	11.13B
Net Income	18.93B	5.89B	14.08B	11.49B	6.74B	2.96B
Balance Sheet
Total Assets	165.62B	165.65B	72.86B	73.25B	75.57B	75.93B
Cash, Cash Equivalents and Short-Term Investments	10.72B	9.35B	14.19B	12.42B	12.16B	7.62B
Total Debt	64.23B	67.57B	39.65B	39.98B	40.27B	41.69B
Total Liabilities	92.34B	97.97B	48.87B	50.54B	50.58B	52.03B
Stockholders Equity	73.28B	67.68B	23.99B	22.71B	24.99B	23.90B
Cash Flow
Free Cash Flow	24.93B	19.41B	17.63B	16.31B	13.32B	11.60B
Operating Cash Flow	25.44B	19.96B	18.09B	16.74B	13.76B	12.06B
Investing Cash Flow	-345.00M	-23.07B	-689.00M	-667.00M	-245.00M	-11.11B
Financing Cash Flow	-24.33B	-1.73B	-15.62B	-15.82B	-8.97B	1.61B

Broadcom Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 359.63
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 359.63 is above the 20-day moving average (MA) of 312.23, above the 50-day MA of 298.07, and above the 200-day MA of 232.77, indicating a bullish trend. The MACD of 15.29 indicates Negative momentum. The RSI at 70.55 is Negative, neither overbought nor oversold. The STOCH value of 83.61 is Negative, 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
MU	80 Outperform	$156.68B	25.27	13.11%	0.31%	58.22%	―
QCOM	79 Outperform	$171.51B	15.33	44.62%	2.19%	15.82%	34.20%
AVGO	77 Outperform	$1.74T	94.42	27.08%	0.64%	28.01%	235.66%
AMD	77 Outperform	$258.91B	91.83	4.70%	―	27.17%	108.67%
TXN	75 Outperform	$168.94B	33.97	29.84%	2.95%	3.62%	-5.27%
Sector *	61 Neutral	$36.70B	12.21	-10.39%	1.84%	8.50%	-7.32%
MRVL	58 Neutral	$57.85B	―	-0.75%	0.36%	37.05%	89.40%

Broadcom Corporate Events

Broadcom Completes Acquisition of VMware for $84.2 Billion

On November 22, 2023, Broadcom Inc. completed its acquisition of VMware, Inc., marking a significant merger in the technology industry. The transaction involved a complex series of mergers and conversions, resulting in VMware becoming a wholly owned subsidiary of Broadcom. VMware shareholders were offered either cash or Broadcom stock, with the total consideration amounting to approximately $30.8 billion in cash and 544 million shares of Broadcom stock valued at $53.4 billion. This acquisition was financed through a combination of cash on hand and $30.4 billion in term loans. Broadcom’s strategic move is expected to enhance its position in the software and infrastructure sectors, potentially offering new growth opportunities and synergies for stakeholders.

The most recent analyst rating on (AVGO) stock is a Buy with a $396.00 price target. To see the full list of analyst forecasts on Broadcom stock, see the AVGO Stock Forecast page.

Broadcom Grants CEO Performance Stock Award for AI Growth

On September 3, 2025, Broadcom‘s Board of Directors granted CEO Hock E. Tan a performance stock unit award to incentivize his leadership through fiscal 2030, aligning with the company’s AI-driven growth strategy. The award’s vesting depends on achieving challenging AI-related revenue targets and continued service, reflecting the company’s commitment to advancing its position in the rapidly evolving technology sector.

The most recent analyst rating on (AVGO) stock is a Buy with a $365.00 price target. To see the full list of analyst forecasts on Broadcom stock, see the AVGO Stock Forecast page.