Broadcom (AVGO) AI Stock Analysis

• Market Cap: $1.58T
• Dividend Yield: 0.69%
• Average Volume (3M): 27.23M
• Price to Earnings (P/E): 69.9
• Beta (1Y): 2.54
• 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: 4,741,274,000
• 10 Day Avg. Volume: 24,568,473
• 30 Day Avg. Volume: 27,225,751
• 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: 1.03
• Enterprise Value/Revenue: 25.35
• Enterprise Value/Gross Profit: 37.41
• Enterprise Value/Ebitda: 47.16
• 1Y Price Target: $457.75
• Price Target Upside: 38.41% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 30
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: $393.00 ▲(18.83% Upside)

Score is driven primarily by strong financial performance (high margins and cash conversion) and upbeat earnings-call outlook led by accelerating AI growth and a large backlog. Offsetting the rating are a stretched valuation (high P/E with low yield) and a mixed/soft technical picture with negative MACD and the stock below its 50-day average.

Positive Factors

Large AI backlog and demand visibility

A $73B, ~18-month AI backlog provides durable multi-quarter revenue visibility, underpinning production planning, capacity allocation and long lead-time customer commitments. This backlog supports sustained cash flow and reduces near-term revenue volatility as AI deployments scale.

High margins and strong cash conversion

Very high gross and net margins combined with almost 1:1 free cash flow to net income indicate durable profitability and exceptional cash generation. This funds R&D, dividends and M&A, providing financial flexibility and resilience through technology cycles.

Scale and recurring infrastructure software revenue

Large, fast-growing infrastructure software revenues (licensing/subscriptions) deliver recurring, higher-margin cash flows that diversify cyclicality of chip sales. Scale in software enhances cross-sell, sticky customer relationships, and predictable long-term revenue streams.

Negative Factors

Non-AI semiconductor revenue stagnation

Flat non-AI semiconductor sales indicate concentration risk on AI demand. If AI growth decelerates, the lack of growth in legacy products could expose overall revenue to cyclicality, limiting diversification and increasing reliance on a single end-market for sustained growth.

Gross margin pressure from AI system and product mix

A structural shift toward lower-margin AI system sales versus standalone chips can compress company-wide gross margins even as revenue rises. Persistent mix-driven margin erosion would reduce free cash flow margins and constrain reinvestment or shareholder returns over time.

Elevated leverage and refinancing activity

A meaningful debt-to-equity ratio coupled with recent large note issuance/refinancing raises refinancing and interest-rate exposure. Elevated leverage limits strategic flexibility and increases risk if cash generation weakens or if credit conditions tighten over the medium term.

Broadcom Business Overview & Revenue Model

Company Description

Broadcom, Inc. is a global technology company, which designs, develops and supplies semiconductor and infrastructure software solutions. The company is headquartered in San Jose, California and currently employs 19,000 full-time employees. The firm operates through four segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other. The company offers a range of products that are used in end-products, such as enterprise and data center networking, home connectivity, set-top boxes, telecommunication equipment, smartphones, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Its product portfolio ranges from discrete devices to complex sub-systems that include multiple device types, and also includes firmware for interfacing between analog and digital systems. Its products include mechanical hardware that interfaces with optoelectronic or capacitive sensors.

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

Strong profitability (TTM gross margin 67.77%, net margin 36.20%) and solid cash generation (operating cash flow to net income 1.49; FCF to net income 97.74%). Balance sheet is healthy overall (ROE 27.01%, equity ratio 47.53%) but leverage remains a notable risk (debt-to-equity 0.80).

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	34.71B	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: 330.73
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 330.73 is below the 20-day moving average (MA) of 338.59, below the 50-day MA of 354.38, and above the 200-day MA of 303.73, indicating a neutral trend. The MACD of -6.73 indicates Positive momentum. The RSI at 43.70 is Neutral, neither overbought nor oversold. The STOCH value of 44.91 is Neutral, 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	$163.54B	30.45	23.34%	2.01%	13.66%	-45.40%
MU	77 Outperform	$489.91B	41.38	22.55%	0.20%	45.43%	203.31%
MRVL	76 Outperform	$70.92B	29.28	18.04%	0.28%	44.95%	―
AVGO	73 Outperform	$1.58T	69.93	31.05%	0.69%	23.87%	285.84%
AMD	73 Outperform	$411.47B	124.63	5.32%	―	31.83%	80.45%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
INTC	57 Neutral	$243.66B	-594.14	-0.25%	―	-1.49%	―

Broadcom Corporate Events

Broadcom Announces $4.5 Billion Senior Notes Offering

On January 6, 2026, Broadcom Inc. entered into an underwriting agreement with a syndicate led by BofA Securities and J.P. Morgan to issue $4.5 billion of unsecured, unsubordinated senior notes, comprising tranches maturing in 2031, 2033, 2036 and 2056, which were subsequently registered and issued under an existing shelf registration and indenture structure. The company plans to use the proceeds for general corporate purposes and to repay existing debt, and in connection with this refinancing strategy, it and its VMware subsidiary notified holders in early January 2026 that they will redeem a total of roughly $4 billion of outstanding notes across four series between January 17 and February 6, 2026, fully retiring several nearer-term issues and potentially extending the group’s overall debt maturity profile on terms defined by make-whole style redemption provisions.

The most recent analyst rating on (AVGO) stock is a Buy with a $500.00 price target. To see the full list of analyst forecasts on Broadcom stock, see the AVGO Stock Forecast page.

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.

The most recent analyst rating on (AVGO) stock is a Buy with a $440.00 price target. To see the full list of analyst forecasts on Broadcom stock, see the AVGO Stock Forecast page.