52-Week Range
$143 – $272
Near multi-year highs
Q1 FY27 Revenue
$19.3B
+29% YoY
AI Revenue (Q1)
$8.4B
+106% YoY
Q2 FY27 AI Guide
$10.7B+
Record, sequential +27%
Non-GAAP EPS (Q1)
$2.10
+28% YoY
FY28E AI Rev Guide
$100B+
CEO "line of sight"
12-Month Price History
Income Statement Forecast ($B) · E = Estimate (FY = Nov–Oct)
| FY2022A | FY2023A | FY2024A | FY2025A | FY2026E | FY2027E | FY2028E | |
|---|---|---|---|---|---|---|---|
| Revenue by Segment | |||||||
| Semiconductor Solutions | $23.0B | $25.1B | $28.2B | $36.7B | $50.0B | $65.0B | $85.0B |
| of which AI | ~$2.5B | ~$4.2B | $12.2B | $21.0B | $34.0B | $56.0B | $100B+ |
| Infrastructure Software (incl. VMware) | $5.5B | $7.8B | $21.8B | $26.5B | $28.2B | $30.0B | $32.0B |
| Total Revenue | $33.2B | $35.8B | $51.6B | $63.2B | $78.0B | $95.0B | $117.0B |
| YoY Growth | +21% | +8% | +44% | +22% | +23% | +22% | +23% |
| Profitability | |||||||
| Non-GAAP Gross Profit | $22.7B | $25.1B | $37.0B | $47.0B | $58.5B | $72.2B | $90.0B |
| Non-GAAP Gross Margin | 68.4% | 70.0% | 71.7% | 74.4% | 75.0% | 76.0% | 77.0% |
| Non-GAAP Operating Income | $17.4B | $19.4B | $28.0B | $36.5B | $47.0B | $59.0B | $74.0B |
| Non-GAAP Op. Margin | 52.4% | 54.1% | 54.3% | 57.8% | 60.3% | 62.1% | 63.2% |
| Non-GAAP EPS | $3.68 | $4.21 | $4.70 | $6.96 | $8.55 | $10.90 | $14.20 |
| EPS Growth YoY | +16% | +14% | +12% | +48% | +23% | +28% | +30% |
Balance Sheet & Cash Flow ($B)
| FY2023A | FY2024A | FY2025A | FY2026E | FY2027E | FY2028E | |
|---|---|---|---|---|---|---|
| Balance Sheet | ||||||
| Cash & Short-Term Inv. | $11.2B | $9.3B | $12.4B | $14.0B | $18.0B | $25.0B |
| Total Debt | $39.6B | $69.0B | $67.6B | $60.0B | $50.0B | $38.0B |
| Total Equity | $30.9B | $88.2B | $89.1B | $95.0B | $105.0B | $120.0B |
| Cash Flow | ||||||
| Operating Cash Flow | $17.6B | $19.7B | $25.5B | $33.0B | $44.0B | $58.0B |
| Capital Expenditures | -$0.5B | -$0.5B | -$0.6B | -$1.5B | -$2.0B | -$2.5B |
| Free Cash Flow | $17.1B | $19.2B | $24.9B | $31.5B | $42.0B | $55.5B |
| FCF Margin | 47.8% | 37.2% | 39.4% | 40.4% | 44.2% | 47.4% |
| Dividends Paid | -$7.1B | -$8.5B | -$11.0B | -$12.5B | -$14.0B | -$16.0B |
Revenue & AI Segment Growth
Total Revenue
AI Revenue
Estimated
Valuation Framework
Base Case Price Target
$310
36.3× FY2026E Non-GAAP EPS · +25% upside
DCF (10yr, 10% WACC, 3% terminal)
$290–$340
FCF CAGR 28%, tapering; AI segment 7x revenue at peak
| Metric | AVGO Current | AVGO @ PT $310 | NVDA (Peer) | MRVL (Peer) |
|---|---|---|---|---|
| Market Cap | ~$1.17T | ~$1.46T | ~$3.3T | ~$178B |
| P/E Non-GAAP (FY2026E) | 29.1× | 36.3× | ~38× | ~34× |
| EV/EBITDA (FY2026E) | 22.4× | 28.0× | ~33× | ~25× |
| AI Rev Growth (FY2026E) | +62% | — | +120% | +55% |
| Non-GAAP FCF Margin | 40% | — | 55% | 30% |
| Dividend Yield | 2.1% | 1.7% | 0.03% | 0.5% |
12-Month Price Target Scenarios
Bull Case
$400
+61% upside
AI XPU revenue reaches $45B in FY2026E as fourth hyperscaler (Amazon custom silicon) announced. VMware cross-sell beats with $30B+ ARR. FY2027 EPS revised to $13+. Multiple holds at 40x+ as AI chip scarcity premium sustains. Dividend raised to $3.00/share.
Base Case
$310
+25% upside
AI segment hits $34B in FY2026E growing 62%. VMware software revenue stabilizes at $27–28B as churn normalizes. Non-GAAP EPS of $8.55 in FY2026E. Multiple of 36x on improving AI confidence and dividend yield support. $100B+ FY2028 guidance confirmed at investor day.
Bear Case
$175
-30% downside
One hyperscaler pivots to in-house XPU design, eliminating $10–15B AI backlog. VMware enterprise churn accelerates as Oracle/Microsoft alternatives gain share. Broadcom forced to cut prices 20% on networking ASICs. Multiple re-rates to 22x on XPU concentration risk.
Key Catalysts — Next 12 Months
Aug 28, 2026
Q2 FY2027 Earnings — AI Revenue Confirmation
Management guided Q2 AI revenue of $10.7B+ — a +27% sequential jump. Delivering on this guidance while maintaining 60%+ non-GAAP margins would firmly establish AVGO's AI silicon trajectory. Any beat on AI guide + FY2027 raise will drive immediate re-rating toward $290+.
2026
FY2028 Investor Day — $100B+ AI Revenue Path
CEO Hock Tan has guided $100B+ in AI chip revenue for FY2028 (ending Oct 2028). An investor day detailing XPU program milestones, tapeout schedules for 2nm processes, and fourth hyperscaler announcements would be the most significant catalyst in the next 12 months for multiple expansion.
2026–2027
VMware Renewal Cycle — Perpetual to Subscription
Broadcom is converting VMware's 300,000+ enterprise customers from perpetual licenses to subscription contracts at 2–3x pricing. The renewal cycle peaks in FY2026–2027. High-margin subscription revenue should push infrastructure software gross margins from 72% toward 80%.
2026
Ethernet AI Fabric Network Share
Broadcom's Tomahawk-5 and Jericho3 switches are winning the AI data center networking fabric battle over InfiniBand. As hyperscalers deploy ultra-large AI clusters (100K+ GPU pods), Broadcom's ethernet switching revenue could add $3–5B incremental to networking segment by FY2027.
Risk Register
High
Hyperscaler Customer Concentration (3 customers = ~80% of AI rev)
Broadcom's AI XPU revenue is concentrated in Google, Meta, and Apple. If any single customer delays XPU orders, insources design, or adopts competing architectures (NVIDIA, AMD), AVGO could face a $5–15B revenue shock. This is the primary risk separating a $175 bear case from the base case.
High
VMware Enterprise Churn — Customer Migration Risk
Broadcom's aggressive pricing on VMware has pushed some enterprise customers toward open-source (OpenShift, Tanzu-less deployments), public cloud migration (AWS, Azure), or Nutanix. Churn of 15–20% of the perpetual license base would reduce software revenue below the $26B FY2026E. Early data shows churn above initial expectations.
Med
TSMC Production Capacity & Geopolitical Risk
Broadcom's 3nm XPU production runs exclusively on TSMC. Any Taiwan geopolitical escalation, yield issues at N3E, or allocation competition from Apple/NVIDIA could delay XPU ramps. TSMC's Arizona fab is years from N3 capability. This is a sector-wide risk but AVGO's concentration amplifies it.
Low
Debt Load ($67.6B Gross Debt)
Post-VMware acquisition debt is elevated but manageable at $25B+ annual FCF. Net debt is declining rapidly — we model net debt below $40B by FY2027. At current free cash flow levels, AVGO can simultaneously delever, pay $12.5B in dividends, and fund modest buybacks.
Market Sentiment & Positioning
Analyst Rating
Strong Buy
38B · 3H · 0S
Avg Price Target
$275
Range: $230 – $330
Hedge Fund Flow
Accumulating
Berkshire rumored interest
Insider Activity
Neutral
Small programmatic sales
Short Interest
1.2%
Very low conviction short
SmartScore
8/10
Outperform
The Bottom Line
▶ Investment Conclusion · BUY · PT $310
Broadcom is the clearest expression of the custom AI silicon thesis. Every major hyperscaler is building custom AI accelerators, and Broadcom is the only company that has the semiconductor IP, packaging technology, and foundry relationships to serve them at scale. The $100B+ FY2028 AI revenue guide — while initially met with skepticism — is becoming more credible with each passing quarter as Q1's $8.4B AI segment demonstrates the compounding effect of three simultaneous XPU ramps.
At 29x non-GAAP forward earnings with a 2.1% dividend yield, AVGO offers an unusual combination of AI growth and capital return. The VMware integration is progressing faster than consensus feared. We rate AVGO BUY with a 12-month PT of $310.
At 29x non-GAAP forward earnings with a 2.1% dividend yield, AVGO offers an unusual combination of AI growth and capital return. The VMware integration is progressing faster than consensus feared. We rate AVGO BUY with a 12-month PT of $310.
MARKET BUZZ RESEARCH — Informational purposes only. Not financial advice. All estimates are Market Buzz projections. Data as of May 31, 2026.