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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on AVGO

Broadcom Inc.'s recent performance has been impacted by concerns over margins, despite a strong backlog of $162 billion and booming AI orders. The company's AI semiconductor revenue surged 74% year-over-year, driven by major hyperscaler orders. However, its premium valuation and margin concerns have raised caution. Wells Fargo's recent upgrade on the company has sparked bullish momentum, but at 15.93 P/S, Broadcom is considered overvalued by some analysts. The successful assimilation of VMware acquisition has contributed to its financial performance.

1.c. Company Highlights

2. Broadcom's AI-Driven Growth Continues

Broadcom reported a record fiscal year 2025 revenue of $64 billion, up 24% year-over-year, driven by AI semiconductors and VMware. The company's AI revenue grew 65% to $20 billion, while semiconductor revenue hit a record $37 billion. In Q4 2025, total revenue was a record $18 billion, up 28% year-over-year, with AI semiconductor revenue of $6.5 billion, up 74%. The company's EPS came out at $1.95, beating estimates of $1.87.

Publication Date: Dec -20

📋 Highlights
  • Record FY2025 Revenue:: Achieved $64 billion, up 24% YoY, driven by AI semiconductors ($20 billion, +65%) and VMware ($27 billion infrastructure software, +26%).
  • Q4 2025 Performance:: Revenue hit $18 billion (+28% YoY), with AI semiconductors reaching $6.5 billion (+74% YoY) and a $73 billion AI backlog expected to ship over 18 months.
  • 2026 Growth Projections:: Q1 revenue guided to $19.1 billion (+28% YoY), AI revenue to double sequentially, and a 10% dividend increase to $0.65/share, with share repurchases extended to 2026.
  • Strategic AI Partnerships:: Secured a $1 billion order from a fifth customer and a 3-year agreement with OpenAI for 10 gigawatts of AI capacity (2027–2029), alongside custom silicon development for top clients.
  • Supply Chain & Technology:: Partially insourcing advanced packaging in Singapore to address bottlenecks and developing silicon photonics for efficient interconnects, despite uncertain near-term adoption timelines.

Segment Performance

Infrastructure software revenue grew 26% to $27 billion, contributing to the overall growth. The company's backlog stands at $73 billion, which will be shipped over the next 18 months, with expectations of more orders being absorbed into the backlog for shipments within the next six quarters. As Hock Tan, Broadcom's CEO, noted, the company has a good handle on bottlenecks in AI system racks, excluding power supplies and transformers.

AI Revenue Growth

Broadcom expects significant growth in AI revenue, with Q1 2026 revenue doubling from Q1 2025. The company has secured a $1 billion order from a fifth customer and has a non-binding agreement with OpenAI to develop 10 gigawatts of AI capacity between 2027 and 2029. The AI business has a lower gross margin than the rest of Broadcom's business, but the company expects operating leverage to benefit its operating margin.

Valuation

With a P/E Ratio of 69.64 and an EV/EBITDA of 48.29, the market is pricing in high growth expectations. The company's ROE is 31.47%, indicating strong profitability. Analysts estimate next year's revenue growth at 51.2%, which may be challenging to sustain given the current valuation multiples.

Outlook

Broadcom expects AI revenue to continue accelerating, driving most of the growth, while non-AI semiconductor revenue is expected to be stable. Infrastructure software revenue is expected to grow at a low double-digit percentage. The company has extended its share repurchase program through the end of 2026 and announced a 10% increase in its quarterly common stock cash dividend.

3. NewsRoom

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2 Stocks Powering OpenAI's and Anthropic's Revenue Surge in 2026

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Source: fool.com

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The Top 5 Stocks to Double Up on Right Now

03:15

Source: fool.com

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Forget Intel: This Smartphone and Auto Chip Giant Is Quietly Building the Better Long‑Term AI Story

Feb -02

Source: fool.com

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Retirees Should Know One Third of FlexShares Dividend Fund Is Actually Technology Stocks

Feb -02

Source: 247wallst.com

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Broadcom and TSMC Emerge as ‘Big Winners' in Custom AI Chip Boom

Feb -02

Source: 247wallst.com

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Should You Invest $1,000 in Broadcom Right Now?

Feb -02

Source: fool.com

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Broadcom Inc. to Announce First Quarter Fiscal Year 2026 Financial Results on Wednesday, March 4, 2026

Feb -02

Source: prnewswire.com

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Broadcom Inc. $AVGO Stock Position Raised by EFG Asset Management North America Corp.

Feb -02

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.34%)

6. Segments

Semiconductor Solutions (Including Intellectual Property Licensing)

Expected Growth: 5.3%

Broadcom’s growth is driven by increasing demand for semiconductor solutions in cloud computing, 5G infrastructure, and IoT devices, as well as its strong intellectual property licensing business

Infrastructure Software

Expected Growth: 10.2%

Broadcom's infrastructure software solutions are poised for growth driven by increasing adoption of 5G, IoT, and cloud computing. Its leading position in the semiconductor industry and strategic acquisitions will drive revenue growth.

7. Detailed Products

Broadcom StrataGX

A family of system-on-a-chip (SoC) products that integrate Ethernet connectivity, CPU, and other peripherals into a single chip.

Broadcom Tomahawk

A family of Ethernet switch chips that provide high-speed and low-latency switching for data center and cloud applications.

Broadcom Trident

A family of Ethernet switch chips that provide high-performance and low-power switching for enterprise and service provider networks.

Broadcom Jericho

A family of network processing units (NPUs) that provide high-performance and programmable packet processing for network infrastructure.

Broadcom MASTERS

A family of optical interconnects that provide high-speed and low-power connectivity for data center and cloud applications.

Broadcom Wi-Fi/Bluetooth Combo

A family of wireless connectivity solutions that provide Wi-Fi and Bluetooth connectivity for mobile and IoT devices.

Broadcom GPS/GNSS

A family of global navigation satellite system (GNSS) solutions that provide location and navigation capabilities for mobile and IoT devices.

Broadcom Storage

A family of storage solutions that provide high-performance and low-power storage for data center and cloud applications.

Broadcom Mainframe

A family of mainframe solutions that provide high-performance and reliable computing for enterprise and government applications.

8. Broadcom Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Broadcom Inc. has a low threat of substitutes due to its unique products and services in the semiconductor industry.

Bargaining Power Of Customers

Broadcom Inc. has a medium bargaining power of customers due to the presence of large OEMs and cloud service providers, but the company's diversified customer base and strong relationships mitigate this risk.

Bargaining Power Of Suppliers

Broadcom Inc. has a low bargaining power of suppliers due to its significant scale and diversified supply chain, which reduces its dependence on individual suppliers.

Threat Of New Entrants

Broadcom Inc. has a low threat of new entrants due to the high barriers to entry in the semiconductor industry, including significant capital expenditures and technological expertise.

Intensity Of Rivalry

Broadcom Inc. operates in a highly competitive industry with intense rivalry among established players, including Qualcomm, Intel, and Texas Instruments.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 62.05%
Debt Cost 4.43%
Equity Weight 37.95%
Equity Cost 10.26%
WACC 6.64%
Leverage 163.54%

11. Quality Control: Broadcom Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
KLA

A-Score: 5.6/10

Value: 0.8

Growth: 8.3

Quality: 7.9

Yield: 2.0

Momentum: 9.5

Volatility: 5.0

1-Year Total Return ->

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Broadcom

A-Score: 5.5/10

Value: 0.0

Growth: 8.3

Quality: 8.2

Yield: 3.0

Momentum: 10.0

Volatility: 3.7

1-Year Total Return ->

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Lam Research

A-Score: 5.5/10

Value: 0.8

Growth: 8.1

Quality: 8.3

Yield: 2.0

Momentum: 9.5

Volatility: 4.3

1-Year Total Return ->

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QUALCOMM

A-Score: 5.5/10

Value: 2.5

Growth: 5.9

Quality: 7.4

Yield: 4.0

Momentum: 7.0

Volatility: 6.0

1-Year Total Return ->

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Applied Materials

A-Score: 5.3/10

Value: 1.6

Growth: 7.9

Quality: 8.1

Yield: 1.0

Momentum: 8.5

Volatility: 5.0

1-Year Total Return ->

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Texas Instruments

A-Score: 4.5/10

Value: 1.0

Growth: 3.6

Quality: 7.1

Yield: 6.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

331.11$

Current Price

331.11$

Potential

-0.00%

Expected Cash-Flows