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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's recent momentum is driven by surging XPU demand, record AI revenues, and an expanding portfolio. The company's AI-fueled revenue surge, rich partner base, and solid cash flow drive growth. A significant new order for $10 billion in custom AI chips and a partnership with OpenAI are key catalysts. The VMware acquisition and innovative networking chips, like the Thor Ultra, position Broadcom as a key AI infrastructure player. AI silicon and high-margin software create a profitability machine, fueling robust revenue and margin expansion.

1.c. Company Highlights

2. Broadcom's AI-Driven Growth Momentum Continues

Broadcom Inc. reported a record Q3 fiscal 2025 revenue of $16 billion, up 22% year-over-year, driven by strong AI semiconductor and VMware performance. The company's AI semiconductor revenue reached $5.2 billion, up 63% year-over-year, fueled by demand for custom AI accelerators. The earnings per share (EPS) came in at $1.69, beating estimates of $1.66. The gross margin was robust, and the adjusted EBITDA margin was 67% for the quarter. For Q4, consolidated revenue is projected at $17.4 billion, up 24% year-over-year, with AI semiconductor revenue expected at $6.2 billion, up 66% year-over-year.

Publication Date: Sep -05

📋 Highlights
  • Q3 Revenue Record:: $16 billion revenue, +22% YoY, driven by AI semiconductors and VMware.
  • AI Semiconductor Surge:: $5.2 billion revenue, +63% YoY, with one customer securing $10 billion in orders.
  • Q4 Revenue Projections:: $17.4 billion expected, +24% YoY, including $6.2 billion in AI semiconductor revenue (+66% YoY).
  • 2026 AI Revenue Outlook:: Exceed 60% YoY growth, supported by $10 billion in orders to be delivered in H2 FY2026.
  • Backlog Strength:: $110 billion pipeline, with 50% from semiconductors, signaling sustained demand.

Valuation Metrics

With a P/E Ratio of 83.01, P/B Ratio of 21.45, and P/S Ratio of 26.17, the market seems to have priced in significant growth expectations. The EV/EBITDA ratio stands at 50.68, indicating a premium valuation. The company's return on equity (ROE) is 27.01%, and return on invested capital (ROIC) is 14.42%, indicating strong profitability.

AI Semiconductor Growth

Broadcom now has four qualified customers for its XPUs, with one securing $10 billion in orders. This has significantly improved the outlook for fiscal 2026 AI revenue, with expectations of growth exceeding 60% year-over-year. The company's leadership in IP development, packaging, and low-power design is a key differentiator in the competitive XPU space.

Non-AI Semiconductor and Infrastructure Software Performance

Non-AI semiconductor revenue grew sequentially in Q4, driven by broadband, server storage, and wireless, reaching $4.6 billion. Infrastructure software revenue was $6.8 billion, up 17% year-over-year, driven by the expanding adoption of VMware's vSphere Cloud Foundation (VCF) within enterprise data centers.

Outlook and Challenges

CEO Hock Tan anticipates a U-shaped recovery for non-AI segments. The company's gross margin is expected to decrease by 70 basis points in Q4, primarily due to a higher mix of XPUs and wireless revenue. Despite this, Broadcom's strong financial results and growth prospects are expected to drive long-term value creation.

3. NewsRoom

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NVDA "Rising Tide," AVGO Accelerating Demand, GOOGL & AMZN Power Competition

01:00

Source: youtube.com

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Prediction: This Will Be the Top-Performing Chip Stock in 2026

Dec -04

Source: fool.com

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Broadcom Emerges as AI Power Play

Dec -04

Source: gurufocus.com

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Broadcom: Entering A New Stage Of Growth (Earnings Preview)

Dec -04

Source: seekingalpha.com

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The Week Ahead: Rate Cut Decision, Broadcom Earnings

Dec -04

Source: schaeffersresearch.com

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Broadcom Inc. (AVGO) Reports Next Week: Wall Street Expects Earnings Growth

Dec -04

Source: zacks.com

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Prediction: This Magnificent Artificial Intelligence (AI) Stock Will Keep Crushing Broadcom After Dec. 11

Dec -04

Source: fool.com

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Live Nasdaq Composite: Markets Hunt Direction as Meta Captures Spotlight

Dec -04

Source: 247wallst.com

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
Lam Research

A-Score: 5.5/10

Value: 0.8

Growth: 8.1

Quality: 8.3

Yield: 2.0

Momentum: 9.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
KLA

A-Score: 5.4/10

Value: 0.8

Growth: 8.4

Quality: 7.9

Yield: 2.0

Momentum: 8.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Broadcom

A-Score: 5.4/10

Value: 0.0

Growth: 7.6

Quality: 8.1

Yield: 3.0

Momentum: 9.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
QUALCOMM

A-Score: 5.3/10

Value: 3.4

Growth: 6.2

Quality: 8.1

Yield: 4.0

Momentum: 4.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Applied Materials

A-Score: 4.9/10

Value: 1.6

Growth: 8.1

Quality: 8.1

Yield: 2.0

Momentum: 5.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Texas Instruments

A-Score: 4.5/10

Value: 1.5

Growth: 3.6

Quality: 6.9

Yield: 6.0

Momentum: 3.0

Volatility: 6.0

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

381.03$

Current Price

381.03$

Potential

-0.00%

Expected Cash-Flows