The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 17 | 62.7x | 20.8x | Bottom tier | |
Growth | 86 | 25.9% | 6.1% | Top tier | |
Quality | 91 | 24.1% | 6.6% | Top tier | |
Safety | 80 | 1.1x | 0.7x | Top tier | |
Capital Return | 23 | 0.62% | 2.02% | Bottom tier | |
Momentum | 64 | 34.7% | 4.1% | Around median | |
Sentiment | 60 | 27 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Broadcom Inc. (AVGO) is one of the world's largest companies in the design, development, and supply of semiconductor solutions and enterprise infrastructure software. The company generates its revenue through two main segments: the Semiconductor Solutions segment, which focuses on advanced networking chips and custom artificial intelligence processors (XPUs), and the Infrastructure Software segment, which provides integrated software solutions for managing virtual and private enterprise clouds, particularly following the acquisition of VMware.
During the second quarter of fiscal year 2026, the company achieved record financial results that exceeded expectations driven by massive demand for AI chips, with consolidated revenue reaching $22.2 billion, representing a 48% year-over-year growth. The company achieved a record operating margin of 67.3%, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached 69% of revenue, reflecting high operational efficiency and the ability to maintain margin stability despite rapid business volume growth.
In terms of segment mix, Semiconductor Solutions revenue reached a record $15 billion (equivalent to 68% of total revenue), driven by a 143% growth in AI chip sales to reach $10.8 billion. In contrast, the Infrastructure Software segment recorded revenue of $7.2 billion (equivalent to 32% of revenue), achieving a 9% year-over-year growth, with Annual Recurring Revenue (ARR) growth stabilizing at 17%.
Broadcom has a strong positive consensus among analysts recommending a 'Buy', with an average price target of $498.19, and estimates ranging from a low of $400 to a high of $582. Looking at the 52-week range of $244.17 to $495, the stock currently trades below the analysts' average price target, indicating an opportunity for capital appreciation if the company succeeds in achieving its ambitious targets for 2027 and 2028.
Figures in the text are as of 2026-06-15; the live price is shown at the top of the page.
Broadcom expects massive growth in AI chip revenue to reach $56 billion in fiscal year 2026, representing an approximate 180% increase compared to fiscal year 2025. Management also confirmed in the recent earnings call its confidence that this revenue will surpass the $100 billion mark in fiscal year 2027. This strong momentum is supported by confirmed orders and clear visibility into customer requirements extending through 2028 based on existing partnerships.
Although AI chips are achieving record growth, they put pressure on the company's consolidated gross margin because their margins are lower compared to the software and traditional semiconductor segments. As a result, the company expects the consolidated gross margin to decline to around 74% in the third quarter of 2026, compared to the 77.1% recorded in the second quarter. However, management asserts that the operating margin will remain stable at around 67% thanks to strong operating leverage and stable SG&A expenses.
In April 2026, Broadcom entered into a long-term agreement with Google to develop and supply multiple generations of TPU processors and AI networking solutions with a substantial and sustainable financial value. In the same month, the company announced a partnership with Meta to deliver multiple generations of MTIA XPUs to power its proprietary models. Broadcom has already received an initial 1 GW order that includes processors and networking solutions, with deliveries scheduled to begin in the second half of 2027.
Automated analysis for informational purposes only — not investment advice.
The 'AI XPU' platform is a strategic initiative established by Broadcom in collaboration with leading investors with strong balance sheets like Apollo and Blackstone to provide sufficient computing capacity at the lowest cost and power consumption for major AI labs. This platform aims to deploy more than 20 GW of computing capacity through 2029 for the benefit of customers like Anthropic and OpenAI. The first tranche of this platform has already been launched at a value of $35 billion, led by Apollo to finance the required infrastructure.
The Infrastructure Software segment achieved revenue of $7.2 billion in the second quarter of 2026, an increase of 9% year-over-year, representing 32% of the company's total revenue. Management expects growth in this segment to accelerate in the third quarter of 2026 to reach approximately $8.9 billion, representing a 31% year-over-year increase. This growth is driven by strong demand for the recently released VMware Cloud Foundation 9.1 suite to support AI workloads in private clouds.