Superworth

Broadcom AVGO

Semiconductors, Technology
$321.68
−0.48%
Market cap
$1.5T
PE
41.1×
9y median 46.3×
Forward PE
18.6×
10y median 15.0×
Price to sales
17.2×
EV/EBIT
37.7×
Revenue, 12 months
$89.1B
+49% on a year ago
Net margin
42.9%
Free cash flow yield
2.6%

A Superworth story

Profits kept climbing as the stock lost a third, and AI's buyers now face dearer money

Cheap on next year's profits, costly on today's cash. It works only if a few big buyers keep spending as borrowing gets harder.

7 charts, with numbers as of

  1. A third below its June peak, back where it stood in April

    Broadcom more than tripled in three years, then peaked in early June. It now trades about a third below that high, back to its early April level. The slide sped up in October. AP reported that chip stocks fell as bond yields hit their highest in years, on worries that AI builders who borrow to buy chips cannot keep spending at this pace. Broadcom lost 4.5% on Friday alone.

  2. Earnings doubled, so the whole slide is in the multiple

    Over the past year reported earnings per share doubled while the price slipped. So the price paid for each dollar of trailing GAAP earnings fell by more than half, from about 90 times a year ago to about 42 now, right at its ten year median. The drop since June is the market paying less for Broadcom's profits, not the profits shrinking.

  3. Sales tripled, first on VMware, now on AI chips

    Quarterly revenue roughly tripled in three years. Hock Tan, the chief executive who built Broadcom by buying companies, added the cloud software maker VMware in late 2023, and it did the early lifting. Now it is AI chips and networking, which brought in 16.7 billion dollars last quarter, more than triple a year earlier. Lighter bars show consensus of about 35 billion for the quarter to early November.

  4. So far AI has widened margins, not thinned them

    In the quarter to August, more than half of every sales dollar became operating profit, the highest of any quarter in ten years. AI sales have so far added profit faster than revenue. The risk is the mix. In the company's segment figures, chips keep about 61 cents of operating profit per dollar of sales and software about 84, so the bigger AI's share grows, the harder that margin is to hold.

  5. On next year's earnings, cheaper than its peers and its recent past

    At today's price, consensus puts Broadcom at about 19 times the next twelve months of earnings, below its five year median and well below its peers, though above its older habit from when growth was far slower. These are adjusted earnings, which leave out stock pay and the amortization from buying VMware, and run about a quarter above GAAP. Points before late September use today's estimates.

  6. The fear is a few big buyers spending borrowed money

    More than half of last quarter's sales were AI chips, sold to a handful of the largest AI builders. Many borrow to build data centers, and AP reports investors worry rising yields will slow that spending. If one buyer pauses, sales fall fast. On cash earned so far it is no bargain: about 40 times free cash flow, more than double its ten year median, though below where it sat for most of the AI rally.

  7. Consensus has sales nearly tripling in two years

    The lighter bars are what the price leans on: consensus has twelve months of sales nearly tripling within two years. The hope behind it is the order book, 179 billion dollars of signed contracts not yet delivered. The test comes on 9 December: fourth quarter results, and whether the AI outlook for next year holds as its buyers' money gets dearer.

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What has happened lately

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Charts

Financials

Income statement for AVGO, by quarter
Income statementQ4 FY23Q1 FY24Q2 FY24Q3 FY24Q4 FY24Q1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26
$9.3B+4%$12B+34%$12.5B+43%$13.1B+47%$14.1B+51%$14.9B+25%$15B+20%$16B+22%$18B+28%$19.3B+30%$22.2B+48%$29.6B+86%
Cost of revenue$2.9B−4%$4.6B+58%$4.7B+80%$4.7B+74%$5.1B+75%$4.8B+4%$4.8B+2%$5.2B+11%$5.8B+14%$6.2B+29%$6.8B+41%$9.1B+74%
Gross profit$6.4B+8%$7.4B+23%$7.8B+27%$8.4B+36%$9B+41%$10.1B+38%$10.2B+31%$10.7B+28%$12.2B+36%$13.2B+30%$15.4B+51%$20.5B+91%
R&D$1.4B+16%$2.3B+93%$2.4B+84%$2.4B+73%$2.2B+61%$2.3B−2%$2.7B+12%$3B+30%$3B+33%$3B+32%$3B+11%$2.9B−5%
SG&A$418M+13%$1.6B+352%$1.3B+192%$1.1B+184%$1B+142%$949M−40%$1.1B−15%$1.1B−3%$1.1B+10%$1B+7%$1.1B−3%$996M−7%
$4.2B+6%$2.1B−49%$3B−26%$3.8B−2%$4.6B+9%$6.3B+201%$5.8B+97%$5.9B+55%$7.5B+62%$8.6B+37%$10.8B+85%$16B+171%
Interest expense$405M−0%$926M+128%$1B+159%$1.1B+162%$916M+126%$873M−6%$769M−27%$807M−24%$761M−17%$801M−8%$776M+1%$778M−4%
Pre-tax income$4B+10%$1.3B−65%$2B−46%$2.8B−22%$3.8B−5%$5.5B+309%$5.1B+154%$5.3B+88%$6.9B+83%$8.2B+49%$10.1B+99%$15.3B+189%
$443M+70%$68M+3%−$116M$4.2B+1464%−$442M−$13M$120M$1.1B−73%−$1.6B+273%$846M$820M+583%$2.2B+91%
Net income$3.5B+5%$1.3B−65%$2.1B−39%−$1.9B$4.3B+23%$5.5B+315%$5B+134%$4.1B$8.5B+97%$7.3B+34%$9.3B+88%$13.1B+216%
$0.82+5%$0.28−68%$0.44−46%−$0.40$0.90+9%$1.14+307%$1.03+134%$0.85$1.74+93%$1.50+32%$1.91+85%$2.68+215%
4.3B−1%4.7B+9%4.8B+12%4.7B+9%4.8B+13%4.8B+4%4.8B+1%4.9B+4%4.9B+1%4.9B+1%4.9B+1%4.9B+1%

Net income: 5 periods, Q4 FY21 to Q4 FY25: printed in the fourth-quarter results release.

EPS, diluted: Q4 FY16 and Q4 FY17: quarter's net income to common over its shares, to the cent. 5 periods, Q4 FY21 to Q4 FY25: printed in the fourth-quarter results release.

Diluted shares: Q4 FY16: a loss quarter: its basic count, share-days: the 12-month average less the 9-month, weighted by days. 4 periods, Q4 FY17 to Q4 FY20: share-days: the 12-month average less the 9-month, weighted by days. 5 periods, Q4 FY21 to Q4 FY25: printed in the fourth-quarter results release.

From each company's 10-Q and 10-K filings, the newest version of each figure. Quarters are as filed (a fourth quarter is the year less its first nine months), fiscal years as the 10-K prints them, restated where a later 10-K restated them, and balance sheet lines as of the period's end. A quarter whose 10-Q isn't filed yet is from the company's results release. Growth is on the same period a year earlier. A dash is a period with no figure for the line: the filing doesn't print it, or it hasn't been read yet.

Estimates

Next earnings report: .

QuarterRevenueRangeEPSRangeAnalysts
Q4 FY26$34.9B$34.8B to $35.1B$3.83$3.70 to $3.9025
Q1 FY27$37B$34B to $38.3B$4.08$3.75 to $4.3322
Q2 FY27$40.4B$38.1B to $41.8B$4.47$4.14 to $4.6710
Q3 FY27$44.7B$42.2B to $46.2B$4.96$4.60 to $5.1810
Q4 FY27$50.9B$48B to $52.6B$5.66$5.25 to $5.9214
Q1 FY28$57.9B$54.6B to $59.9B$6.31$5.85 to $6.6011
Q2 FY28$65.2B$61.6B to $67.5B$7.02$6.51 to $7.3321
Q3 FY28$74B$69.9B to $76.6B$7.94$7.36 to $8.3013

Peers

Companies in Semiconductors nearest Broadcom's size, closest first.

CompanyMarket capPEIts 10y median PEFwd PEP/SRevenue growthNet margin
AVGOBroadcom$1.5T41.1×46.3×18.6×17.2×+49%42.9%
MUMicron Technology$992.9B11.8×18.1×5.0×7.5×+256%63.8%
AMDAdvanced Micro Devices$843.6B133×106×45.7×20.4×+40%15.6%
NVDANVIDIA$5.1T26.7×54.4×17.5×16.8×+83%63.7%
INTCIntel$438.6Bn/m13.3×50.0×7.7×+7%−19.8%
AMATApplied Materials$299.4B32.5×19.7×21.3×9.7×+8%30.1%
LRCXLam Research$287.9B34.3×21.2×22.6×11.0×+33%32.3%
TXNTexas Instruments$260B36.9×24.1×27.0×12.5×+20%34.3%
MRVLMarvell Technology$200.4B75.4×30.1×40.3×21.2×+31%27.9%
KLACKLA$190.2B39.7×24.0×26.2×14.0×+12%35.6%
ADIAnalog Devices$189.5B46.4×39.5×24.1×13.7×+34%29.8%
Peer median$293.7B36.9×24.0×25.2×13.1×+32%31.2%

Investors who own it

Investors we follow who held Broadcom at the end of Jun 30, 2026, from their 13F filings.

More on Broadcom

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About

Chief executive
Hock Tan, since 2006CEO of Avago since 2006, which bought Broadcom in 2016. Source
Industry
Semiconductors
Sector
Technology

Valuation data, not investment advice. Prices as of .