Key Stats for Broadcom Stock
- Last-30-Day Performance: -8%
- 52-Week Range: $138 to $415
- Valuation Model Target Price: $692
- Implied Upside: 113%
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What Happened?
Broadcom stock fell about 8% in the last 30 days, recently trading near $325 per share after closing at $325.17. The decline reflected valuation compression across large-cap AI semiconductor stocks as investors trimmed high-multiple exposure despite continued strong earnings momentum.
The stock moved lower in the last 30 days as investors reassessed valuation levels following Broadcom’s sharp AI-driven rally, even after the company delivered record results and raised forward expectations.
Broadcom reported Q4 revenue of $18 billion, up 28% year over year, driven by AI semiconductor revenue of $6.5 billion that surged 74%, while full-year revenue reached a record $64 billion with AI revenue climbing 65% to $20 billion.
CEO Hock Tan said, “We have never seen bookings of the nature that what we have seen over the past 3 months,” as AI order backlog exceeded $73 billion scheduled for delivery in the next 18 months.
Management guided Q1 fiscal 2026 revenue to $19.1 billion and expects AI revenue to double year over year to $8.2 billion, reinforcing strong near-term momentum.
However, the market reaction suggests investors are weighing the sustainability of AI capital spending and potential margin impacts from system-level rack deployments.
Institutional positioning showed mixed adjustments. Varma Mutual Pension Insurance Co increased its stake by 6.6% to 621,230 shares worth $204.95 million, while Illinois Municipal Retirement Fund boosted its holdings by 2.9% to 257,853 shares valued at $85.07 million.
At the same time, Cornerstone Investment Partners reduced its stake by 23.4%, CENTRAL TRUST Co trimmed holdings by 3.1%, and CIBC World Market lowered its position by 3.3% to 1,674,487 shares valued at $552.43 million.
Institutional ownership stands at 76.4%, suggesting portfolio rebalancing rather than broad institutional exit.
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Is Broadcom Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 38.4%
- Operating Margins: 65.2%
- Exit P/E Multiple: 28.3x
Revenue growth is being driven by structural AI infrastructure expansion rather than a typical semiconductor recovery cycle.
Fiscal 2026 revenue is estimated at $96,951 million, up from $63,887 million in fiscal 2025, reflecting rapid scaling of custom AI accelerators, networking switches, DSPs, and optical connectivity across hyperscale data centers.
AI demand is supported by backlog visibility. Broadcom reported more than $73 billion of AI-related backlog scheduled for delivery in the next 18 months, and Q1 AI revenue is expected to reach $8.2 billion, roughly doubling year over year.
That level of forward visibility is uncommon in the semiconductor industry and supports earnings acceleration into fiscal 2026.
Margin durability remains strong. Q4 gross margin was 77.9%, and infrastructure software revenue totaled $27 billion in fiscal 2025, up 26% year over year, providing high-margin recurring cash flow alongside semiconductor expansion.
Based on these inputs, the valuation model estimates a target price of $692, implying about 113% total upside and a 32.1% annualized return.
At current levels near $325, Broadcom appears undervalued if AI backlog conversion and VMware monetization continue scaling through 2026.
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