Broadcom's Growth Prospects for 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy AVGO?
Source: Fool
- Revenue Growth Forecast: Broadcom is expected to experience explosive revenue growth by 2026, driven by its networking portfolio and AI chip revenue, with analysts projecting AI revenue to double to around $40 billion; combined with Alphabet's capital expenditures of $175 billion to $185 billion, Broadcom's total revenue is set to approach $64 billion, indicating strong market demand.
- Margin Changes: While Broadcom's revenue is set to soar, its gross margins may shrink, particularly for ASICs which typically hover in the mid-50% range due to high-priced third-party components; however, gross profit growth remains positive, reflecting the company's resilience in profitability.
- Stock Performance Outlook: Broadcom's stock is well-positioned to outperform in 2023 and beyond, especially with significant growth opportunities in the AI infrastructure space, as its success with TPUs has attracted other companies like OpenAI to seek its custom AI chips, further expanding market opportunities.
- Competitive Advantage: With AI ASICs expected to gradually replace GPUs, Broadcom stands out as a leading growth story in the AI infrastructure sector, providing a solid foundation for long-term outperformance in a growth-focused market.
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Analyst Views on AVGO
Wall Street analysts forecast AVGO stock price to rise
30 Analyst Rating
29 Buy
1 Hold
0 Sell
Strong Buy
Current: 333.510
Low
370.00
Averages
457.75
High
525.00
Current: 333.510
Low
370.00
Averages
457.75
High
525.00
About AVGO
Broadcom Inc. is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software and security solutions. The Company operates through two segments: semiconductor solutions and infrastructure software. Its semiconductor solutions segment includes all of its product lines and intellectual property (IP) licensing. It provides a variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications. Its infrastructure software segment includes its private and hybrid cloud, application development and delivery, software-defined edge, application networking and security, mainframe, distributed and cybersecurity solutions, and its FC SAN business. It provides a portfolio of software solutions that enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Broadcom's AI Chip Demand Soars, Stock Performance Strong
- Surging Market Demand: Broadcom has seen skyrocketing demand for its data center chips and networking equipment, with its stock soaring 49% last year, significantly outperforming rival Nvidia's 38% gain, highlighting its strong position in the AI market.
- Robust Customer Orders: Major AI companies like Google and Anthropic have placed orders totaling $21 billion for Broadcom's Ironwood chips, indicating the increasing importance of its hardware in AI development and further solidifying its market share.
- Accelerating Revenue Growth: Broadcom anticipates total revenue of approximately $19.1 billion for the first quarter of fiscal 2026, representing a 28% year-over-year increase, with AI semiconductor revenue expected to reach $8.2 billion, showcasing strong growth in AI hardware sales.
- Valuation and Investment Advice: Despite Broadcom's high P/E ratio of 68, which is more than double the Nasdaq-100's 32, investors should note its projected 50% annual revenue growth, suggesting a long-term hold strategy for better returns.
See More
Broadcom's Growth Prospects for 2026
- Revenue Growth Forecast: Broadcom is expected to experience explosive revenue growth by 2026, driven by its networking portfolio and AI chip revenue, with analysts projecting AI revenue to double to around $40 billion; combined with Alphabet's capital expenditures of $175 billion to $185 billion, Broadcom's total revenue is set to approach $64 billion, indicating strong market demand.
- Margin Changes: While Broadcom's revenue is set to soar, its gross margins may shrink, particularly for ASICs which typically hover in the mid-50% range due to high-priced third-party components; however, gross profit growth remains positive, reflecting the company's resilience in profitability.
- Stock Performance Outlook: Broadcom's stock is well-positioned to outperform in 2023 and beyond, especially with significant growth opportunities in the AI infrastructure space, as its success with TPUs has attracted other companies like OpenAI to seek its custom AI chips, further expanding market opportunities.
- Competitive Advantage: With AI ASICs expected to gradually replace GPUs, Broadcom stands out as a leading growth story in the AI infrastructure sector, providing a solid foundation for long-term outperformance in a growth-focused market.
See More
Broadcom's Revenue Growth Forecast for 2026
- Revenue Growth Potential: Broadcom is projected to reach $64 billion in revenue by 2026, driven primarily by its networking portfolio and AI chip revenue, particularly the surge in demand for custom AI chips (TPUs) developed in partnership with Alphabet, indicating strong growth prospects in the AI infrastructure sector.
- Capital Expenditure Impact: Alphabet plans to invest between $175 billion and $185 billion in capital expenditures in 2026, with a significant portion allocated to data center construction and the development of its custom chips, which will directly drive Broadcom's AI revenue to potentially double to around $40 billion, possibly underestimating actual growth potential.
- Margin Changes: Despite the strong revenue growth momentum, Broadcom's gross margins are expected to shrink, particularly for ASIC products, which typically have margins in the mid-50% range due to the need to purchase high-priced third-party components, potentially impacting overall profitability, yet gross profit growth remains optimistic.
- Competitive Market Advantage: Broadcom's growth opportunities in the AI infrastructure space are substantial, as other companies like OpenAI seek to collaborate with it to develop custom AI chips, positioning Broadcom to continue expanding its market share and becoming one of the most promising growth stories in the industry over the coming years.
See More
AMD and Broadcom Achieve Record Revenues in 2025
- AMD Financial Performance: In 2025, AMD achieved record revenue of $34.6 billion with a gross margin of 50% and earnings per share of $2.65, anticipating a 32% growth in Q1 2026 and a non-GAAP gross margin of 55%, indicating strong market demand and profitability.
- Broadcom's Growth Potential: Broadcom also set a record in 2025 and is expected to continue its growth momentum into Q1 2026, boasting an AI-specific backlog of approximately $73 billion, showcasing its robust competitive edge through a diversified product portfolio.
- Market Competitive Landscape: While both AMD and Broadcom are experiencing rapid growth, Broadcom is poised to dominate the next decade due to its diverse offerings in custom chips, networking, and enterprise software, reflecting the strategic significance of its business model.
- Investor Considerations: Despite Broadcom's trailing P/E of 68 being slightly lower than AMD's 79, both stocks are viewed as expensive, necessitating caution among investors, especially as the tech sector faces uncertainties.
See More
AMD vs. Broadcom: Who Will Dominate the Next Decade?
- AMD's Strong Performance: In 2025, AMD achieved record full-year revenue of $34.6 billion with a gross margin of 50% and earnings per share of $2.65, and it anticipates a 32% growth in Q1 2026 with a non-GAAP gross margin of 55%, indicating robust market demand and sustained growth potential.
- Broadcom's Robust Outlook: Similarly, Broadcom posted record revenues in 2025 and is expected to continue this momentum into Q1 2026, boasting an AI-specific backlog of approximately $73 billion, highlighting its strong market position and future growth prospects in the AI sector.
- Valuation Challenges: Both AMD and Broadcom have high stock prices, with AMD's P/E ratio at 79 and Broadcom's at 68, reflecting market expectations for future growth but also potential valuation pressures, necessitating cautious risk assessment by investors.
- Competitive Landscape: Broadcom's diversified portfolio across custom chips, networking, and enterprise software provides multiple growth engines, positioning it to dominate the next decade, while AMD is also actively entering the AI market, indicating an intensifying competition.
See More
AMD vs. Broadcom: Which One Will Dominate the Next Decade?
- AMD's Strong Performance: In 2025, AMD achieved a record full-year revenue of $34.6 billion with a gross margin of 50% and earnings per share of $2.65, and it anticipates a 32% growth in Q1 2026 with a non-GAAP gross margin of 55%, indicating robust market demand and sustained growth potential.
- Broadcom's Robust Results: Similarly, Broadcom posted record revenues in 2025 and is expected to continue this momentum into Q1 2026, boasting an AI-specific backlog of approximately $73 billion, with a trailing P/E ratio of 68, reflecting its strong market position and future growth drivers.
- Competitive Market Landscape: While AMD's outlook is promising, Broadcom's diversified portfolio across custom chips, networking, and enterprise software provides a competitive edge, positioning it to dominate the next decade.
- Investment Recommendation Analysis: Despite Broadcom's high stock price, analysts suggest its greater growth potential warrants attention, urging investors to consider Broadcom's diversified strategy and strong demand in the AI market.
See More
Broadcom's AI Chip Demand Soars, Stock Performance Strong
- Surging Market Demand: Broadcom has seen skyrocketing demand for its data center chips and networking equipment, with its stock soaring 49% last year, significantly outperforming rival Nvidia's 38% gain, highlighting its strong position in the AI market.
- Robust Customer Orders: Major AI companies like Google and Anthropic have placed orders totaling $21 billion for Broadcom's Ironwood chips, indicating the increasing importance of its hardware in AI development and further solidifying its market share.
- Accelerating Revenue Growth: Broadcom anticipates total revenue of approximately $19.1 billion for the first quarter of fiscal 2026, representing a 28% year-over-year increase, with AI semiconductor revenue expected to reach $8.2 billion, showcasing strong growth in AI hardware sales.
- Valuation and Investment Advice: Despite Broadcom's high P/E ratio of 68, which is more than double the Nasdaq-100's 32, investors should note its projected 50% annual revenue growth, suggesting a long-term hold strategy for better returns.
See More
Broadcom's Growth Prospects for 2026
- Revenue Growth Forecast: Broadcom is expected to experience explosive revenue growth by 2026, driven by its networking portfolio and AI chip revenue, with analysts projecting AI revenue to double to around $40 billion; combined with Alphabet's capital expenditures of $175 billion to $185 billion, Broadcom's total revenue is set to approach $64 billion, indicating strong market demand.
- Margin Changes: While Broadcom's revenue is set to soar, its gross margins may shrink, particularly for ASICs which typically hover in the mid-50% range due to high-priced third-party components; however, gross profit growth remains positive, reflecting the company's resilience in profitability.
- Stock Performance Outlook: Broadcom's stock is well-positioned to outperform in 2023 and beyond, especially with significant growth opportunities in the AI infrastructure space, as its success with TPUs has attracted other companies like OpenAI to seek its custom AI chips, further expanding market opportunities.
- Competitive Advantage: With AI ASICs expected to gradually replace GPUs, Broadcom stands out as a leading growth story in the AI infrastructure sector, providing a solid foundation for long-term outperformance in a growth-focused market.
See More
Broadcom's Revenue Growth Forecast for 2026
- Revenue Growth Potential: Broadcom is projected to reach $64 billion in revenue by 2026, driven primarily by its networking portfolio and AI chip revenue, particularly the surge in demand for custom AI chips (TPUs) developed in partnership with Alphabet, indicating strong growth prospects in the AI infrastructure sector.
- Capital Expenditure Impact: Alphabet plans to invest between $175 billion and $185 billion in capital expenditures in 2026, with a significant portion allocated to data center construction and the development of its custom chips, which will directly drive Broadcom's AI revenue to potentially double to around $40 billion, possibly underestimating actual growth potential.
- Margin Changes: Despite the strong revenue growth momentum, Broadcom's gross margins are expected to shrink, particularly for ASIC products, which typically have margins in the mid-50% range due to the need to purchase high-priced third-party components, potentially impacting overall profitability, yet gross profit growth remains optimistic.
- Competitive Market Advantage: Broadcom's growth opportunities in the AI infrastructure space are substantial, as other companies like OpenAI seek to collaborate with it to develop custom AI chips, positioning Broadcom to continue expanding its market share and becoming one of the most promising growth stories in the industry over the coming years.
See More
AMD and Broadcom Achieve Record Revenues in 2025
- AMD Financial Performance: In 2025, AMD achieved record revenue of $34.6 billion with a gross margin of 50% and earnings per share of $2.65, anticipating a 32% growth in Q1 2026 and a non-GAAP gross margin of 55%, indicating strong market demand and profitability.
- Broadcom's Growth Potential: Broadcom also set a record in 2025 and is expected to continue its growth momentum into Q1 2026, boasting an AI-specific backlog of approximately $73 billion, showcasing its robust competitive edge through a diversified product portfolio.
- Market Competitive Landscape: While both AMD and Broadcom are experiencing rapid growth, Broadcom is poised to dominate the next decade due to its diverse offerings in custom chips, networking, and enterprise software, reflecting the strategic significance of its business model.
- Investor Considerations: Despite Broadcom's trailing P/E of 68 being slightly lower than AMD's 79, both stocks are viewed as expensive, necessitating caution among investors, especially as the tech sector faces uncertainties.
See More
AMD vs. Broadcom: Who Will Dominate the Next Decade?
- AMD's Strong Performance: In 2025, AMD achieved record full-year revenue of $34.6 billion with a gross margin of 50% and earnings per share of $2.65, and it anticipates a 32% growth in Q1 2026 with a non-GAAP gross margin of 55%, indicating robust market demand and sustained growth potential.
- Broadcom's Robust Outlook: Similarly, Broadcom posted record revenues in 2025 and is expected to continue this momentum into Q1 2026, boasting an AI-specific backlog of approximately $73 billion, highlighting its strong market position and future growth prospects in the AI sector.
- Valuation Challenges: Both AMD and Broadcom have high stock prices, with AMD's P/E ratio at 79 and Broadcom's at 68, reflecting market expectations for future growth but also potential valuation pressures, necessitating cautious risk assessment by investors.
- Competitive Landscape: Broadcom's diversified portfolio across custom chips, networking, and enterprise software provides multiple growth engines, positioning it to dominate the next decade, while AMD is also actively entering the AI market, indicating an intensifying competition.
See More
AMD vs. Broadcom: Which One Will Dominate the Next Decade?
- AMD's Strong Performance: In 2025, AMD achieved a record full-year revenue of $34.6 billion with a gross margin of 50% and earnings per share of $2.65, and it anticipates a 32% growth in Q1 2026 with a non-GAAP gross margin of 55%, indicating robust market demand and sustained growth potential.
- Broadcom's Robust Results: Similarly, Broadcom posted record revenues in 2025 and is expected to continue this momentum into Q1 2026, boasting an AI-specific backlog of approximately $73 billion, with a trailing P/E ratio of 68, reflecting its strong market position and future growth drivers.
- Competitive Market Landscape: While AMD's outlook is promising, Broadcom's diversified portfolio across custom chips, networking, and enterprise software provides a competitive edge, positioning it to dominate the next decade.
- Investment Recommendation Analysis: Despite Broadcom's high stock price, analysts suggest its greater growth potential warrants attention, urging investors to consider Broadcom's diversified strategy and strong demand in the AI market.
See More
