Key Stats for AVGO Stock
- 52-Week Range: $195.94 to $429.31
- Current Price: $410.98
- Street Mean Target: ~$475
- TIKR Model Target (Mid): ~$1,121
- Market Cap: $1.92 trillion
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Broadcom Just Posted Record Revenue and Guided Way Above Consensus.
Broadcom (AVGO) is essentially two businesses in one, with the first being a semiconductor company designing custom AI accelerators and high-speed networking chips for the world’s largest AI clusters. The second is an enterprise software company built around VMware, which runs the private cloud infrastructure of most of the Fortune 500. CEO Hock Tan calls it a “two-engine” model. Right now, both engines are running at full speed.
Q1 fiscal 2026 revenue of $19.31 billion grew 29% year over year and beat estimates. AI semiconductor revenue of $8.4 billion grew 106%, above even Broadcom’s own forecast. Non-GAAP EPS of $2.10 beat estimates. The real news was the Q2 guidance: around $22 billion in revenue, up 47% year over year, well above the $20.5 billion consensus. On the call, Tan said Broadcom has “line of sight to achieve AI chip revenue in excess of $100 billion in 2027.”
The AI backlog sits at $73 billion across custom accelerators and networking components, with deliveries expected over the next 18 months. Broadcom designs custom AI chips for Google, Meta, Anthropic, and OpenAI, purpose-built alternatives to Nvidia’s general-purpose GPUs that are more efficient at scale. The company backed its confidence with a $10 billion share buyback authorization.
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What Wall Street Is Saying About Broadcom
Around 92% of analysts covering AVGO have a buy or strong buy rating, one of the highest consensus ratings among large-cap technology stocks. The street mean target of around $475 implies roughly 15% upside from current levels.
The bear case is narrow but worth noting, as Broadcom derives a meaningful portion of its revenue from China and trade tensions create persistent headline risk. Customer concentration is also real. A shift in hyperscaler chip strategies would have an outsized impact on AI semiconductor revenue. VMware’s post-acquisition pricing changes also created friction with some enterprise customers, and churn bears watching.
Broadcom Stock Financials: The Operating Leverage Is Becoming Very Clear
Revenue grew from $27.5 billion in fiscal 2021 to $63.9 billion in fiscal 2025, while free cash flow expanded from $8.7 billion to $26.9 billion over the same period. That combination of top-line growth and cash conversion is what makes Broadcom structurally different from most chip companies.
The software floor is the key. VMware’s infrastructure segment generated $6.8 billion in Q1 alone at gross margins above 93%. That recurring revenue base provides financial stability while the AI semiconductor business scales. The forward two-year revenue CAGR consensus sits around 58%, and the forward two-year EPS CAGR sits around 63%. For a company already generating $64 billion in annual revenue, those are extraordinary numbers.
NVIDIA is the obvious comparison point, but the more useful frame is complementary rather than competitive. NVIDIA sells general-purpose GPUs. Broadcom designs custom silicon for hyperscalers who want purpose-built alternatives. Both are benefiting from the same AI capex wave from different angles.
What Does a $1,121 Price Target Actually Require From Broadcom?
TIKR’s mid-case model targets around $1,121 for AVGO, built on around 26% annual revenue growth through 2030 and net income margins expanding toward 53%. Based on the current price, that implies an around 177% total return over roughly 4.5 years, or about 25% annualized. The high case gets you toward $2,945 by the full 2034 horizon.
What the Bulls Are Betting On:
- The $100 billion AI chip target is real. A $73 billion backlog with 18 months of delivery runway provides more near-term revenue certainty than almost any other semiconductor company can claim.
- VMware margins keep expanding. Software gross margins above 93% are exceptional. As the perpetual-to-subscription transition completes in late 2026, analysts expect a meaningful surge in software operating income.
- The custom ASIC market keeps growing. Every major hyperscaler is designing proprietary AI chips, and Broadcom is the primary design partner for most of them.
What the Bears Are Watching:
- Hyperscalers bring chip design fully in-house. If major customers reduce reliance on Broadcom’s design services over time, the semiconductor revenue concentration risk becomes more acute.
- China exposure persists. A meaningful portion of revenue is tied directly to China or to the supply chain. Escalating trade restrictions would pressure that portion of the business.
- VMware customer churn. Post-acquisition pricing changes created friction. If enterprise migration away from VMware accelerates beyond management’s expectations, the software floor drops.
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Should You Invest in Broadcom?
Broadcom is one of the few technology companies where near-term numbers, backlog visibility, and long-term structural positioning are all pointing in the same direction. The two-engine model gives it something most AI semiconductor plays lack: a high-margin software base that keeps generating cash regardless of where the chip cycle sits.
At around $411, with a $73 billion AI backlog and a CEO willing to put a $100 billion chip-revenue target on the record for 2027, the investment case is clearer than most. Add AVGO to your TIKR watchlist and track AI semiconductor revenue each quarter as the primary indicator of whether that target is on schedule. Start your own analysis of Broadcom alongside every other stock on your radar with a free TIKR account.
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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!
