Broadcom (AVGO) stock has been in a steady uptrend with returns of 89% in the last 52 weeks. However, the stock had touched highs of $414.6 in December 2025, and there has been an almost 20% correction. With industry tailwinds translating into a healthy growth outlook, it seems like a good opportunity to accumulate AVGO stock.
To put things into perspective, Broadcom recently reported Q1 FY26 results, and top-line growth was 29% on a year-on-year (YoY) basis to $19.3 billion. This momentum was driven by healthy growth in AI semiconductors.
Importantly, the company’s CEO, Hock Tan, believes that Broadcom is in the “line of sight to achieve AI revenue from chips in excess of $100 billion in 2027.” Tan also underscored the point that the supply chain has been secured to achieve this target. Therefore, the next 12 to 24 months are likely to be characterized by strong growth momentum and will imply positive price action.
About Broadcom Stock
Headquartered in Palo Alto, Broadcom is a designer, developer, and supplier of semiconductor and infrastructure software solutions for mission-critical infrastructure. The company’s primary business segments include Semiconductor Solutions and Infrastructure Software.
For FY25, Broadcom clocked revenue of $63.9 billion. The company’s growth is backed by investment in research & development, which was at $11 billion for FY25. Broadcom’s innovation edge is underscored by the fact that its IP portfolio has approximately 19,000 patents. With a focus on high-growth areas of AI, cybersecurity, private cloud, and others, Broadcom is likely to benefit from structural industry tailwinds.
While Broadcom continues to deliver robust numbers, AVGO stock has remained mostly sideways in the last six months. This is primarily due to some correction and volatility in technology stocks. For long-term investors, this time correction presents a good opportunity for exposure.
AI Semiconductor Solutions to Drive Growth
In the coming years, the company’s AI semiconductor solution is likely to be the growth driver. For Q1 FY26, Broadcom reported 106% YoY growth in AI semiconductor solutions to $8.4 billion. Further, AI semiconductor revenue is expected to be $10.7 billion in Q2 FY26. With customers that include Alphabet (GOOG) (GOOGL), Meta Platforms (META), ByteDance, Anthropic, and OpenAI, the growth visibility is clear.
This momentum will also translate into healthy growth in adjusted EBITDA and free cash flows. For Q1 FY26, the company reported free cash flow of $8 billion. This implies an annual FCF potential of $32 billion and gives Broadcom high financial flexibility for investment in growth and innovation. The company also has a history of acquisition-driven growth, and there is ample flexibility to pursue deals that accelerate growth and widen the product offerings.
Another point to note is that the infrastructure software segment growth was muted in Q1 at 1%. However, this segment commands a high margin and supports free cash flows. Broadcom has guided for 9% growth in the infrastructure software segment in Q2 to $7.2 billion. The overall growth momentum and margin story is therefore likely to remain positive.
What Do Analysts Say About AVGO Stock?
Based on 42 analysts with coverage, AVGO stock is a consensus “Strong Buy.” An overwhelming majority of 36 analysts assign a “Strong Buy” rating. Further, three analysts have a “Moderate Buy” rating, and three more analysts have a “Hold” rating.
Analysts have a mean price target of $446.74, implying about 34% potential upside from here. Further, the most bullish price target of $525 suggests that AVGO stock could rise as much as 58% from current levels.
The bullish view on AVGO stock is underscored by the point that analysts expect earnings growth of 54.53% and 40.23% for FY26 and FY27, respectively. Additionally, based on the Q1 dividend of 65 cents, AVGO stock offers a healthy annualized dividend of $2.6 per share. Considering the earnings growth potential, it’s likely that dividends will continue to swell. As a matter of fact, Broadcom has increased dividends at a CAGR of 30% between FY16 and FY26.
On the date of publication, Faisal Humayun Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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