Key Stats for Broadcom Stock
- Current Price: $323.24
- Street Target: ~$528
- Upside to Street Target: ~63%
- NTM P/E: ~19x
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What Happened?
Broadcom (AVGO) fell 4.31% to $323.24 on October 22 as chip stocks slid on renewed worries about AI spending. The drop came three days after the company signed NTT DOCOMO to a 10-year VMware agreement, its first 10-year VMware software deal in Japan. The October 19 announcement covers the private cloud behind DOCOMO’s digital services, which has run on VMware since 2019. On October 20, FedEx (FDX) renewed its VMware contract. Neither release disclosed a dollar value.
The October 22 close left shares about 33% below their June closing high. The slide began with a 12.59% drop on June 4 after fiscal Q2 results. It then extended through September and October amid worries about Google’s chip sourcing and AI spending and financing. Meanwhile, the software side has drawn far less attention.
VMware Earns Higher Margins Than the AI Chips
Semiconductor solutions brought in $20,839 million in fiscal Q3 (ended August 2), up 127% year over year. Infrastructure software, built mostly on VMware, added $8,752 million, up 29% and 30% of revenue.
Software is the more profitable side. In fiscal 2025, it earned $20,765 million of segment operating income on $27,029 million of revenue, about 77%, versus about 58% for semiconductors. Both figures exclude amortization, stock-based compensation, and other costs Broadcom does not assign to segments. Multi-year renewals make that profit stream more predictable. VMware’s licensing changes, though, have led to legal disputes with some customers, including T-Mobile US.
Forecasts Climbed While the Stock Fell Below Its February Level
Broadcom’s next-twelve-month EPS estimate (normalized) rose from $10.30 on February 1 to $17.34 on October 21, up 68%. Part of that reflects the window rolling into faster-growth quarters, but fixed-year forecasts rose too. The fiscal 2027 revenue estimate climbed from about $131 billion on December 31, 2025, to about $174 billion on October 22. Shares, meanwhile, slipped from $331.30 on February 1 to $323.24 on October 22.
That cut the forward P/E from about 32 times in February to about 19 times. On October 21, that put Broadcom near NVIDIA (NVDA) at about 18 times. Marvell Technology (MRVL) traded at about 43 times and Advanced Micro Devices (AMD) at about 50 times. The multiple compressed steadily through the year, and the October declines came alongside broad chip selloffs on October 16 and October 22.
TIKR tracks 50 analysts on Broadcom. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Broadcom, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Broadcom’s Analyst Ratings
December Decides What Happens to Record Cash
At the Goldman Sachs Communacopia + Technology Conference on September 8, CEO Hock Tan said Broadcom will “end 2026 with a record amount of cash sitting on our books end of this quarter, end of October.” He said the Board usually sets capital allocation at its December meeting. Because prepaying low-rate debt makes little sense to him, he pointed to higher dividends and buybacks as the likely options.
The capacity is there. Fiscal Q3 free cash flow was $13,665 million, and cash reached $23,975 million. Broadcom repurchased $8,450 million of stock in the first three fiscal quarters but none in Q3, when it repaid $5,628 million of debt. Tan described options, not a commitment.
Wall Street View
- Mean Street Target: ~$528
- Median Street Target: ~$535
- Target Range: ~216to~660
- Ratings: 40 Buy, 7 Outperform, 3 Hold, 2 No Opinion, 0 Sell
The mean target, a 12-month view, sits about 63% above the October 22 close, while the lowest sits about 33% below it. With 47 of 52 ratings at Buy or Outperform, analysts have not followed the stock down.
Broadcom’s fiscal Q4 report is expected in December; as of October 23, no date had been announced. The average revenue estimate in TIKR’s data is around $34.9 billion, in line with the $34.8 billion guide. Broadcom has topped the average revenue estimate in each of the last five quarters, yet shares fell the next day after three of those reports. A revenue beat paired with a larger buyback from the December Board meeting would test whether 19 times earnings underprices the business.
So what is Broadcom stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
