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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 margin concerns, despite a robust 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, concerns over AI spending and a high valuation multiple of 15.93 P/S have raised questions about its upside potential. Oppenheimer raised its price target on the company ahead of earnings, citing its strong fundamentals. Wells Fargo upgraded Broadcom, sparking bullish momentum.

1.c. Company Highlights

2. Broadcom's AI-Driven Growth Continues Unabated

Broadcom Inc.'s fiscal Q1 2026 revenue reached a record $19.3 billion, up 29% year-on-year, with adjusted EBITDA hitting a record $13.1 billion, or 68% of revenue. The semiconductor business revenue was a record $12.5 billion, up 52% year-on-year, driven by AI semiconductor revenue of $8.4 billion, up 106% year-on-year. The actual EPS came out at $2.05, beating estimates of $2.03. For Q2 2026, Broadcom guides for consolidated revenue of approximately $22 billion, representing 47% year-on-year growth, with semiconductor revenue expected to be $14.8 billion, up 76% year-on-year.

Publication Date: Mar -06

📋 Highlights
  • Record Q1 Revenue & EBITDA:: Broadcom's fiscal Q1 2026 revenue hit $19.3B (+29% YoY), with adjusted EBITDA at $13.1B (68% of revenue).
  • AI Semiconductor Surge:: AI semiconductor revenue reached $8.4B (+106% YoY), driving semiconductor business revenue to $12.5B (+52% YoY).
  • Q2 Guidance:: Projects consolidated revenue of $22B (+47% YoY), $14.8B semiconductor revenue (+76% YoY), and $10.7B AI semiconductor revenue (+140% YoY).
  • Shareholder Returns:: Returned $10.9B to shareholders in Q1, with an additional $10B share repurchase program announced.
  • AI Revenue Outlook:: Targets AI chip revenue exceeding $100B by 2027, with 33-40% from networking components and 10 GW capacity by 2027.

AI Business Dominates Growth

The company's AI business is the main driver of its growth, with AI semiconductor revenue expected to be $10.7 billion, up 140% year-on-year. CEO Hock Tan discussed the company's AI business, citing strong demand for its networking components, particularly its Tomahawk 6 switch and 1.6 terabit optical transceivers. The company expects AI networking components to account for 33-40% of its AI revenue. Tan also addressed the disaggregation of AI workloads, noting that customized XPUs will become more prevalent.

Strategic Partnerships and Supply Visibility

The company has secured supply visibility for key components through 2028, thanks to its strategic partnerships with suppliers and its custom silicon design capabilities. Tan mentioned that the company has visibility into its customers' plans, allowing it to anticipate demand. The company is well-positioned to benefit from the growth of AI, with its XPUs and networking components playing a critical role in the development of large language models.

Valuation Metrics

With a P/E Ratio of 63.18 and an EV/EBITDA of 41.87, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 44.2%, which is lower than the current year's growth rate. The ROE of 32.85% and ROIC of 17.64% indicate a strong return on equity and invested capital, respectively. The Dividend Yield is 0.73%, which is relatively low.

Customer Plans and XPU Adoption

The company's engagements with its major customers are strategic and targeted, providing clear visibility into their plans. The customers are starting with inference, but many are now using XPUs for both training and inference, which are interchangeable. One customer, OpenAI, has a deal for 10 gigawatts through 2029, with expectations of reaching over 1 gigawatt in 2027, implying a sharp inflection in 2028.

3. NewsRoom

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Top 5 Unstoppable AI Stocks to Buy for 2026

Mar -10

Source: fool.com

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Broadcom: A Once In A Generation Opportunity That Won't Last

Mar -10

Source: seekingalpha.com

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These are 4 AI chip stocks Citi wants you buying now

Mar -10

Source: invezz.com

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Rep. David Taylor Sells Off Shares of International Business Machines Corporation (NYSE:IBM)

Mar -10

Source: defenseworld.net

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Rep. David Taylor Purchases Shares of Microsoft Corporation (NASDAQ:MSFT)

Mar -10

Source: defenseworld.net

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Rep. David Taylor Sells Fifth Third Bancorp (NASDAQ:FITB) Shares

Mar -10

Source: defenseworld.net

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Rep. David Taylor Sells Off Shares of Salesforce Inc. (NYSE:CRM)

Mar -10

Source: defenseworld.net

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Parker-Hannifin (NYSE:PH) Shares Unloaded Rep. David Taylor

Mar -10

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

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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

342.58$

Current Price

342.58$

Potential

-0.00%

Expected Cash-Flows