News about Broadcom

Micas Networks announced a compact co-packaged optics (CPO) switch built on Broadcom's Tomahawk 6-Davisson chip, with production expected in early 2027. Davisson is Broadcom's third-generation CPO switch and can move 102.4 terabits per second. A paper presented in October 2025 said Meta tested Broadcom's previous-generation CPO switches for one million cumulative device hours without a single link failure, while using 65% less power per lane than traditional pluggable optics. Davisson has not yet published comparable data, and Nvidia's Spectrum-X Photonics CPO switch is already in full production. Broadcom (AVGO) trades at a forward non-GAAP P/E of 30.43x, about 11% above its 5-year average, though analysts expect earnings to rise about 71% this fiscal year.

Broadcom (AVGO) closed at $328.75 on October 16, 2026, 31.5% below its highest close of the past year, and shareholders lost 5.7% over twelve months while the S&P 500 returned 16.2%. The price-to-earnings multiple fell to 43.7 a year after 82.1 at the end of September 2025, as diluted EPS doubled from $3.92 to $7.83, yet it remains higher than at 19 of 35 earlier quarter ends since late 2017. The operating margin reached 48.5% over the twelve months to August 2, 2026, the highest at any quarter end since late 2016. AI semiconductor revenue was $16.7 billion in fiscal Q3 2026, 56% of total revenue, and management guided fiscal Q4 revenue to $34.8 billion, up 93%, while analysts expect about $35.6 billion. Management said supply is secured to roughly double AI revenue to about $115 billion in fiscal 2027, but land, power, and shell for data centers remain a major concern.

Broadcom (AVGO) and Marvell (MRVL) both reported strong AI results this summer as hyperscalers increasingly want chips designed around their own models. Broadcom's AI semiconductor revenue reached $16.70 billion, up 221% year over year, with XPUs making up 73% of AI revenue, and it expects AI revenue of about $115 billion in fiscal 2027 and $230 billion in fiscal 2028. Marvell's data center revenue rose 46% to $2.17 billion, driven by connectivity such as optical DSPs and switching, and management expects its custom business to more than double in fiscal 2028. The article flags Broadcom's customer concentration and supply bottlenecks as key risks, while Broadcom is down 4.49% year to date and Marvell is up 168.54%.

According to Holdings Channel, Newport Capital Group LLC opened a new position of 3,096 shares of Broadcom in the third quarter, worth about $1,156,000, or roughly 0.8% of its portfolio as its 23rd-largest holding. The article highlights mixed news: CEO Hock Tan warned that rising financing costs and speculative AI spending could slow expansion, while Broadcom reportedly plans $60 billion of financing linked to Anthropic. Erste Group raised its FY2027 earnings forecast, but higher-than-expected inflation has prompted investors to rotate away from expensive tech and AI stocks. Bank of America cut its price target from $530.00 to $460.00 while keeping a buy rating.

The author suggests that a $3,000 stake split among five shares of Nvidia, three of Broadcom, and two of Taiwan Semiconductor could grow to over $9,000 by the end of 2030, if AI infrastructure spending keeps expanding. For Nvidia, analysts expect fiscal 2031 revenue near $1.2 trillion, while the author's own estimate is over $1.9 trillion, which at a 20 forward P/E implies about $830 per share. Broadcom's custom AI chip business is projected to double twice to $230 billion, and with EPS of $52.15 at a 20 forward P/E, the stock could trade near $1,043. TSMC, the world's largest foundry, is assumed to reach adjusted EPS of about $48.35 in 2031, implying roughly $967 per share. The main risk noted is an AI slowdown.

The article argues that Broadcom, which designs custom AI chips for large hyperscaler clients such as Alphabet, Meta, Anthropic and OpenAI, could grow strongly. AI semiconductor revenue is expected to reach $57.6 billion this year, $115 billion next year and $230 billion by 2028, roughly a fourfold increase in two years. Adding non-AI revenue of about $48 billion this year, growing 10% a year in 2027 and 2028, the author estimates about $288 billion in total revenue by 2028. Assuming a 40% profit margin, below the 44% in the latest quarter, and a 30 times earnings multiple, the author arrives at a $3.45 trillion company value versus $1.65 trillion today, implying a $10,000 investment could become $20,000 by the end of 2028 if the projections hold.