# Broadcom (AVGO.US)

Canonical: https://gigainvestors.com/s/AVGO

Analysis as of: 2026-10-16T07:26:41.233Z. Financial observations: FY2006–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $344.33 per share; close as of 2026-10-15.

Estimated value: low $103.30 per share, central $116.90 per share, high $135.01 per share. Buy at or below the central value $116.90 per share. Valuation as of 2026-10-16T07:26:41.233Z; scenarios are not confidence intervals.

Expected annual return: 5.3% at the stated quote. About 5.3% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 0 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 0

- Operating margin variation: 0.41×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.13×

- FY2018: 0.25×

- FY2019: 0.15×

- FY2020: 0.17×

- FY2021: 0.31×

- FY2022: 0.43×

- FY2023: 0.45×

- FY2024: 0.26×

- FY2025: 0.40×

- LTM to Jul 2026: 0.48×

### moat: pass

- ROIC, median of available years: 43.9%

- ROIC, second-lowest year: 21.5%

- Typical minus recent gross margin: -8.8 pp

- Typical gross margin (annual median): 59.0%

- Recent gross margin (lower of latest and 3-year median): 67.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.8%

- ROIC including acquisitions, ten-year median: 20.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: -4.2%

- FY2017: 48.2%

- FY2018: 39.7%

- FY2019: 21.5%

- FY2020: 28.9%

- FY2021: 93.2%

- FY2022: >100%

- FY2023: >100%

- FY2024: 31.2%

- FY2025: 78.5%

### economics: pass

- Owner earnings / net income, 5-yr: 1.36×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $126B

- Net income, five-year total: $93B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 0.1 pp

- Working capital / revenue, change between three-year averages: 0.3 pp

- Working capital / revenue, final three-year average: 16.2%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.40×

- FY2023: 1.24×

- FY2024: 2.61×

- FY2025: 1.35×

- LTM to Jul 2026: 1.20×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 39.7% vs 78.5%

- Per-share earnings: 0.40 to 3.30 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 5.4%

- Ordinary dilution, 5-year annual growth: 2.9%

- Market cap gain: $1.69T

- Cumulative retained earnings: $10.0B

- Diluted shares, 10-year annual growth: 5.4%

- Diluted shares, 5-year annual growth: 2.9%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 30.1%

- Per-share value change: $2.89

- Per-share value, starting three-year median: $0.40

- Per-share value, ending three-year median: $3.30

- Buybacks concentrated in cheaper years (correlation): 0.69

- Average buyback yield: 2.9%

- Buyback history: 8 years

- Debt-funded buybacks: Yes

- Acquisition spending: $150B

- Cumulative net income, 10 years: $79B

- ROIC, first three-year median: 39.7%

- ROIC, last three-year median: 78.5%

Chart: Earnings per share; fiscal year observations.

- FY2016: -$0.45

- FY2017: $0.40

- FY2018: $2.84

- FY2019: $0.65

- FY2020: $0.70

- FY2021: $1.57

- FY2022: $2.72

- FY2023: $3.30

- FY2024: $1.23

- FY2025: $4.77

### accounting: fail

- latest-year receivables to sales index (DSRI) exceeds 1.465

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -2.6%

- Receivables to sales index (DSRI): 1.55×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 27.5%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.19×

- Accounting red flags: 2

- Goodwill and intangibles / equity: 1.60×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -10.3%

- FY2017: -8.9%

- FY2018: 6.7%

- FY2019: -10.3%

- FY2020: -12.0%

- FY2021: -9.3%

- FY2022: -7.2%

- FY2023: -5.5%

- FY2024: -8.5%

- FY2025: -2.6%

## Holders

- [David Tepper](https://gigainvestors.com/AM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Sarah Ketterer](https://gigainvestors.com/CAU): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [David Hoeft](https://gigainvestors.com/DAC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Steven Romick](https://gigainvestors.com/FPA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Nygren](https://gigainvestors.com/HA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Allen Bond](https://gigainvestors.com/JIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [David Katz](https://gigainvestors.com/MAVFX): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Andrew Adams](https://gigainvestors.com/MPF): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Robert Torray](https://gigainvestors.com/T): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Chase Coleman](https://gigainvestors.com/TGM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [William Von Mueffling](https://gigainvestors.com/cc): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 23% since May 2026 · "Broadcom (AVGO) Shares Fell As Slower AI Development Raised Demand Concerns" (finance.yahoo.com, Sep 2026) · sales +39.5%

Story as of 2026-10-16T09:58:20.884Z; price observation 2026-10-15.

Price needs cash profits to grow 14.9% a year for ten years

- 2025-06-06: Broadcom forecasts $5.1B AI semiconductor revenue for Q3 2025 as AI networking demand accelerates ([seekingalpha.com](https://seekingalpha.com/news/4456045-broadcom-forecasts-5_1b-ai-semiconductor-revenue-for-q3-2025-as-ai-networking-demand?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2025-09-30: Broadcom Inc. (AVGO) Posts $15.95B Q3 Revenue, AI Segment Surges 63% ([finance.yahoo.com](https://finance.yahoo.com/news/broadcom-inc-avgo-posts-15-184531716.html))

- 2025-10-13: Broadcom soars after OpenAI pact for 10GW of AI chips ([finance.yahoo.com](https://finance.yahoo.com/news/broadcom-soars-openai-pact-10gw-133626248.html))

- 2025-12-12: Broadcom shares fall as margin warning sparks AI payoff worries ([finance.yahoo.com](https://finance.yahoo.com/video/broadcom-shares-fall-margin-warning-184254621.html))

- 2026-04-29: AVGO Rides AI Boom: Explosive Growth in Semiconductor Fuels Outlook ([finance.yahoo.com](https://finance.yahoo.com/sectors/technology/articles/avgo-rides-ai-boom-explosive-180600633.html))

- 2026-06-03: Broadcom stock sinks 15% as AI chip forecast disappoints ([finance.yahoo.com](https://finance.yahoo.com/markets/article/broadcom-stock-sinks-15-as-ai-chip-forecast-disappoints-165602704.html))

### Sales · FY2025–2026

sales +39.5%; source https://www.sec.gov/Archives/edgar/data/1730168/000173016825000121/avgo-20251102.htm; observed 2025-12-18.

- FY2017: $18B 

- FY2018: $21B 

- FY2019: $23B 

- FY2020: $24B 

- FY2021: $27B 

- FY2022: $33B 

- FY2023: $36B 

- FY2024: $52B 

- FY2025: $64B 

- FY2026: $89B 

### Gross margin · FY2025

gross margin 67.8%; source https://www.sec.gov/Archives/edgar/data/1730168/000173016825000121/avgo-20251102.htm; observed 2025-12-18.

- FY2016: 44.9% 

- FY2017: 48.2% 

- FY2018: 51.5% 

- FY2019: 55.2% 

- FY2020: 56.6% 

- FY2021: 61.4% 

- FY2022: 66.5% 

- FY2023: 68.9% 

- FY2024: 63.0% 

- FY2025: 67.8% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in semiconductors; annual sales are USD 63.9 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2025: revenue 63887000000; grossProfit 43294000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); AVGO.US: Broadcom Inc. designs, develops, and supplies various semiconductor devices and infrastructure software solutions internationally. The company operates in two segments: Semiconductor Solutions and Infrastructure Software. The company offers networking connectivity, such as custom silicon solutions, ethernet switching & routing, ethernet NIC controllers, physical layer devices, and fiber optic components; wireless device connectivity, including RF semiconductor devices, connectivity solutions, custom touch controllers, and inductive charging ASICS; servers and storage system solutions, such as PCIE switches, SAS & raid products, fibre channel products, and HDD & SSD solutions; broadband solutions, includes set-top box, and broadband access; and industrial. The company also offers a private cloud software portfolio, including the VMware Cloud Foundation, Edge, vSphere foundation, telco cloud platform, private AI, live recovery, application networking and security, application development and data services; mainframe software, such as AIOPS & automation, database & data management, DEVX & DEVOPS, cybersecurity & compliance management, beyond code programs, foundational & open mainframe solutions; cybersecurity, such as endpoint, network, information, application security, and identity & access management; enterprise software; and fc san management. Its products are used in various applications in enterprise and data center networking, including artificial intelligence networking and connectivity, home connectivity, set-top boxes, broadband access, telecommunication equipment, wireless device and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was founded in 1961 and is headquartered in Palo Alto, California.

### Why customers stay

Margins ranged from 63% to 68.9% during 2023–25; it earns 43.9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2023: grossProfit / revenue = 68.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2024: grossProfit / revenue = 63%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2025: grossProfit / revenue = 67.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); 10-year return on capital observations [[2016,-0.04202236961893614],[2017,0.482074785887912],[2018,0.39667825415218233],[2019,0.21526345396587288],[2020,0.28881853504101307],[2021,0.931526576452195],[2022,2.123142708840099],[2023,2.8125344354569135],[2024,0.31227741498055167],[2025,0.7853554809085026]]; median 0.4393765200200472. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 6.3 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2016: growth capex 0; upkeep 723000000; owner earnings 576000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2017: growth capex 0; upkeep 1069000000; owner earnings 5349000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2018: growth capex 0; upkeep 635000000; owner earnings 15684000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2019: growth capex 0; upkeep 432000000; owner earnings 8073000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2020: growth capex 0; upkeep 463000000; owner earnings 9402000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2021: growth capex 0; upkeep 443000000; owner earnings 12334000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2022: growth capex 0; upkeep 424000000; owner earnings 16055000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2023: growth capex 0; upkeep 452000000; owner earnings 17465000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2024: growth capex 0; upkeep 548000000; owner earnings 15357000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2025: growth capex 0; upkeep 623000000; owner earnings 31278000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); Dividend observations: [[2016,750000000],[2017,1653000000],[2018,2998000000],[2019,4235000000],[2020,5534000000],[2021,6212000000],[2022,7032000000],[2023,7645000000],[2024,9814000000],[2025,11142000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2025: cash repurchases 6310000000 USD.

### Are managers owners

Insiders own 1.9% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); AVGO.US SharesStats.PercentInsiders = 1.916 percentage points; cache date 2026-10-16.

### What could break it

"Our substantial indebtedness could adversely affect our financial health" (SEC filing, Dec 2025)

- Source: https://www.sec.gov/Archives/edgar/data/1730168/000173016825000121/avgo-20251102.htm (filed 2025-12-18); Our substantial indebtedness could adversely affect our financial health

### What the price says

The price assumes cash profits grow 14.9% yearly over ten years; actual growth was 26.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); Ten-year compound average after fade. Initial solved rate 0.20262552224749292. Price 344.33; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.6038327736527099 → FY2025 6.4450855141149805. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $17.03 per share

- 2016-11: $17.05 per share

- 2016-12: $17.68 per share

- 2017-01: $19.95 per share

- 2017-02: $21.09 per share

- 2017-03: $21.90 per share

- 2017-04: $22.08 per share

- 2017-05: $23.95 per share

- 2017-06: $23.31 per share

- 2017-07: $24.67 per share

- 2017-08: $25.21 per share

- 2017-09: $24.25 per share

- 2017-10: $26.39 per share

- 2017-11: $27.79 per share

- 2017-12: $25.69 per share

- 2018-01: $24.80 per share

- 2018-02: $24.65 per share

- 2018-03: $23.57 per share

- 2018-04: $22.94 per share

- 2018-05: $25.21 per share

- 2018-06: $24.26 per share

- 2018-07: $22.18 per share

- 2018-08: $21.90 per share

- 2018-09: $24.67 per share

- 2018-10: $22.35 per share

- 2018-11: $23.74 per share

- 2018-12: $25.43 per share

- 2019-01: $26.83 per share

- 2019-02: $27.54 per share

- 2019-03: $30.07 per share

- 2019-04: $31.84 per share

- 2019-05: $25.16 per share

- 2019-06: $28.79 per share

- 2019-07: $29.00 per share

- 2019-08: $28.26 per share

- 2019-09: $27.61 per share

- 2019-10: $29.29 per share

- 2019-11: $31.62 per share

- 2019-12: $31.60 per share

- 2020-01: $30.52 per share

- 2020-02: $27.26 per share

- 2020-03: $23.71 per share

- 2020-04: $27.16 per share

- 2020-05: $29.13 per share

- 2020-06: $31.56 per share

- 2020-07: $31.68 per share

- 2020-08: $34.71 per share

- 2020-09: $36.43 per share

- 2020-10: $34.96 per share

- 2020-11: $40.16 per share

- 2020-12: $43.79 per share

- 2021-01: $45.05 per share

- 2021-02: $46.99 per share

- 2021-03: $46.37 per share

- 2021-04: $45.62 per share

- 2021-05: $47.23 per share

- 2021-06: $47.68 per share

- 2021-07: $48.54 per share

- 2021-08: $49.72 per share

- 2021-09: $48.49 per share

- 2021-10: $53.17 per share

- 2021-11: $55.37 per share

- 2021-12: $66.54 per share

- 2022-01: $58.59 per share

- 2022-02: $58.74 per share

- 2022-03: $62.97 per share

- 2022-04: $55.44 per share

- 2022-05: $58.01 per share

- 2022-06: $48.58 per share

- 2022-07: $53.55 per share

- 2022-08: $49.91 per share

- 2022-09: $44.40 per share

- 2022-10: $47.01 per share

- 2022-11: $55.10 per share

- 2022-12: $55.91 per share

- 2023-01: $58.50 per share

- 2023-02: $59.43 per share

- 2023-03: $64.15 per share

- 2023-04: $62.65 per share

- 2023-05: $80.80 per share

- 2023-06: $86.74 per share

- 2023-07: $89.87 per share

- 2023-08: $92.29 per share

- 2023-09: $83.06 per share

- 2023-10: $84.14 per share

- 2023-11: $92.57 per share

- 2023-12: $111.63 per share

- 2024-01: $118.00 per share

- 2024-02: $130.05 per share

- 2024-03: $132.54 per share

- 2024-04: $130.03 per share

- 2024-05: $132.86 per share

- 2024-06: $160.55 per share

- 2024-07: $160.68 per share

- 2024-08: $162.82 per share

- 2024-09: $172.50 per share

- 2024-10: $169.77 per share

- 2024-11: $162.08 per share

- 2024-12: $231.84 per share

- 2025-01: $221.27 per share

- 2025-02: $199.43 per share

- 2025-03: $167.43 per share

- 2025-04: $192.47 per share

- 2025-05: $242.07 per share

- 2025-06: $275.65 per share

- 2025-07: $293.70 per share

- 2025-08: $297.39 per share

- 2025-09: $329.91 per share

- 2025-10: $369.63 per share

- 2025-11: $402.96 per share

- 2025-12: $346.10 per share

- 2026-01: $331.30 per share

- 2026-02: $319.55 per share

- 2026-03: $309.51 per share

- 2026-04: $417.43 per share

- 2026-05: $446.77 per share

- 2026-06: $377.75 per share

- 2026-07: $389.28 per share

- 2026-08: $370.34 per share

- 2026-09: $351.19 per share

- 2026-10: $357.31 per share

## Annual estimated value (USD per share)

- FY2016: low $8.44 per share, central $9.50 per share, high $10.91 per share

- FY2017: low $12.24 per share, central $13.57 per share, high $15.35 per share

- FY2018: low $14.33 per share, central $16.18 per share, high $18.64 per share

- FY2019: low $18.98 per share, central $21.44 per share, high $24.72 per share

- FY2020: low $23.85 per share, central $26.91 per share, high $30.97 per share

- FY2021: low $30.23 per share, central $34.03 per share, high $39.08 per share

- FY2022: low $41.31 per share, central $46.62 per share, high $53.69 per share

- FY2023: low $44.33 per share, central $50.01 per share, high $57.57 per share

- FY2024: low $54.75 per share, central $62.06 per share, high $71.79 per share

- FY2025: low $72.65 per share, central $82.24 per share, high $95.01 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:32:18.658Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1730168/000173016825000121/avgo-20251102.htm); period 2025-11-02, filed 2025-12-18.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.