Key Takeaways for Broadcom Stock as of July 2026
- Broadcom paid stockholders $3.1 billion in cash dividends during fiscal Q2 2026, funded by free cash flow of $10.3 billion, or 46% of revenue.
- The quarterly dividend sits at $0.65 per share, up from $0.59 held for four straight quarters before it.
- Payout ratio has fallen to 33% as of the most recent quarter, down from 67% two quarters earlier, against a dividend yield of 0.8%.
- TIKR’s mid case model puts Broadcom stock’s target price at $1,000 by October 2030, worth a 177% total return and a 27% annualized rate.
Broadcom’s Q2 Cash Machine Makes the Dividend Look Almost an Afterthought
Broadcom (AVGO) posted record fiscal Q2 2026 revenue of $22.2 billion on its June 3, 2026 call, up 48% year-over-year. AI semiconductor revenue hit a record $10.8 billion, up 143% from a year ago.
CEO Hock Tan said bookings for AI semiconductors topped $30 billion against the $10.8 billion shipped in the quarter. That gap is why he expects AI semiconductor revenue to double in the second half versus the first.
For the full year, Tan guided AI semiconductor revenue to $56 billion, up roughly 180% from fiscal 2025. He reiterated that fiscal 2027 AI semiconductor revenue will exceed $100 billion.
Set against that growth, CFO Kirsten Spears reported free cash flow of $10.3 billion for the quarter, representing 46% of revenue. Broadcom paid stockholders $3.1 billion in cash dividends, based on a quarterly dividend of $0.65 per share.
Spears also noted the balance sheet building fast: Broadcom ended Q2 with $19.6 billion of cash, up from $14.2 billion the prior quarter. That cash pile grew even as inventory rose to $4.3 billion to secure AI supply.
Multi-gigawatt commitments with Google, Anthropic, OpenAI, and Meta extend that cash trajectory well past this year. Tan said the company’s planning visibility now runs through 2028, versus 2027 just three months earlier.
Tan also announced a funding vehicle with Apollo and Blackstone to deploy more than 20 gigawatts of AI compute capacity through 2028, with a first tranche valued at $35 billion already launching. That spending sits alongside the dividend on Broadcom’s balance sheet, not in place of it.
None of that leaves the dividend looking stretched. A $3.1 billion quarterly payout is a rounding error against $10.3 billion of free cash flow generated in the same three months.
AVGO Stock’s Payout Ratio Just Cut Itself in Half
The quarterly dividend now stands at $0.65 per share, up from $0.59 across the four quarters before it and $0.53 the year before that.
Payout ratio tells a sharper story. It sat at 67.29% as of the August 2025 reading, then dropped to 32.84% by November 2025 and now reads 33.21% as of the most recent quarter.
That decline lines up with the free cash flow surge Spears described on the call. A shrinking payout ratio alongside a rising dividend dollar figure is the definition of a dividend gaining room, not losing it.
Dividend yield sits at 0.8% as of July 2, 2026, roughly in the middle of its range over the past year. That modest yield reflects a stock price that has climbed hard, keeping the payout small relative to the price even as the per-share dividend keeps rising.
A payout ratio holding near 33% would confirm the dividend still has slack against Broadcom’s AI-driven cash flow. If it climbs back toward 60%, as it did last August, that slack starts closing.
Broadcom Stock’s $1,000 TIKR Target Bets on AI Volume, Not the Dividend
TIKR’s mid case model puts Broadcom stock’s target price at $1,000 by October 2030, a 177% total return and a 27% annualized rate from the $360 price on July 2, 2026.
That trajectory prices Broadcom stock as a compounder built on AI semiconductor volume, with the dividend contributing only a small slice of the total return.
The path rests on the growth Tan and Spears guided to on the call: AI semiconductor revenue reaching $56 billion in fiscal 2026 and exceeding $100 billion in fiscal 2027, backed by $30 billion of bookings against $10.8 billion shipped in the quarter. Free cash flow of $10.3 billion, or 46% of revenue, gives that forecast a funding base wide enough to keep both capital expenditures and the dividend growing at once.
Should You Invest in Broadcom Inc.?
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