Custom AI chips are driving Broadcom's earnings growth. Broadcom's major clients include several AI heavy hitters.
For those interested in getting paid with some AI exposure, Broadcom (AVGO), Vertiv (VRT), and Caterpillar (CAT) all fit the criteria.
Broadcom generates massive free cash flow and has successfully integrated VMware to expand its high-margin infrastructure software business. Intel is undergoing a significant transformation by expanding its foundry services and securing strategic government partnerships.
Broadcom just posted its ninth straight earnings beat while AI revenue exploded triple digits year-over-year, yet the stock has barely moved in 2026. Something has to give, and our model has a strong opinion on which direction.
Broadcom (AVGO) trades at an attractive forward PE, with strong EPS growth projected through fiscal 2028. AVGO has a consistent track record of exceeding earnings expectations, with analyst estimates and future growth projections rising. Current analyst price target of $531.85 implies 49% upside, with a 17.4x forward PE on 2028 earnings.
On CNBC's “Halftime Report Final Trades,” Rob Sechan, CEO of NewEdge Wealth, picked Broadcom Inc. (NASDAQ:AVGO).
AMD is riding two powerful trends in inference and agentic AI. Broadcom's growth will be driven by TPUs and other custom chips.
The next quarterly Broadcom Inc. (NASDAQ: AVGO) dividend has been approved for September 30, payable to stockholders of record at the close of business today, September 21, 2026.
Broadcom's custom AI accelerators and networking silicon are driving rapid growth, supported by co-design relationships with 6 frontier-model developers. Google's supplier diversification and rising custom-chip competition could pressure Broadcom's share of future TPU design work. The custom chip product mix is pressuring gross margins due to higher memory content, which is getting more expensive. But operating leverage is sustaining EBIT margin expansion regardless.
Nvidia grew revenue 106% year over year to $96.2 billion in its latest quarter, and management is forecasting about 70% revenue growth in fiscal 2028. Broadcom says it has already secured the manufacturing supply to double its AI chip revenue to about $115 billion next fiscal year.