Is Broadcom Stock Priced Right Against Its Peers?
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Broadcom (AVGO) ranked second in both revenue growth and operating margin among six large chip companies over their latest four fiscal quarters. Yet its stock ranked last. Broadcom shares lost 6.8% from October 28, 2025, to October 29, 2026, while all five rivals rose. So how does the price buyers pay for Broadcom’s earnings compare with what they pay for its rivals?
Broadcom Trades At A Middling P/E Among Chip Peers
Broadcom trades at 43.0 times earnings, the third highest multiple among the five companies whose P/E can be compared. Texas Instruments commands the closest P/E in the group at 40.0 times, though it grew revenue 20.3% over its latest four fiscal quarters compared with 48.7% for Broadcom. Broadcom also retains more of every sales dollar as operating profit, generating a 48.5% margin against 41% at Texas Instruments. Even so, Texas Instruments stock returned 91.4% from October 28, 2025, to October 29, 2026.
Broadcom is not the cheapest company in the group relative to its results. NVIDIA is the only peer to outpace Broadcom in both growth and margin, increasing revenue 83.4% over its latest four fiscal quarters. NVIDIA also trades at a lower P/E of 26.8 times. Buyers therefore pay about the same for Broadcom as for a much slower grower, and less for the one rival that grows faster.
A stock’s multiple can drift far from how fast the business is actually growing. A recent example: Tesla is still valued at about $1.5 trillion, about 12 times sales, even though its deliveries fell two years in a row. Read Trefis Big Story: How Tesla Blundered.
| AVGO | NVDA | QCOM | MRVL | AMD | TXN | |
|---|---|---|---|---|---|---|
| Four Fiscal Quarters | ended 2026-08-02 (Q4 FY2025 to Q3 FY2026) | ended 2026-07-26 (Q3 FY2026 to Q2 FY2027) | ended 2026-06-28 (Q4 FY2025 to Q3 FY2026) | ended 2026-08-01 (Q3 FY2026 to Q2 FY2027) | ended 2026-06-27 (Q3 FY2025 to Q2 FY2026) | ended 2026-09-30 (Q4 FY2025 to Q3 FY2026) |
| Market Value (USD billion) | 1644 | 5168 | 196 | 196 | 924 | 285 |
| P/E | 43 | 26.8 | 21.2 (not in the P/E rank) | 74.2 | 143.7 | 40 |
| Revenue Growth | 48.7% | 83.4% | 1.9% | 30.6% | 39.5% | 20.3% |
| Operating Margin | 48.5% | 65.2% | 23.3% | 16.8% | 15.7% | 41.1% |
| Total Return, Incl. Dividends, 2025-10-28 to 2026-10-29 | -6.8% | 6.5% | 4.6% | 147.2% | 119.5% | 91.4% |
AI Chips Now Bring In Most Of Broadcom’s Revenue
Management said on the September 2, 2026 call that Broadcom generated $16.7 billion in AI semiconductor revenue during fiscal Q3 2026, the quarter ended August 2. That figure accounted for 56% of total revenue and grew 221% from a year earlier. Most of this revenue comes from custom chips Broadcom builds for individual customers such as Google, OpenAI and Meta, while the rest comes from chips that link servers together in AI data centers.
Broadcom’s other large business is infrastructure software. This segment, which includes VMware, brought in $8.8 billion in fiscal Q3 2026, up 29% from a year earlier. On the company’s adjusted measure, management expects Broadcom’s gross margin to fall to about 73% in fiscal Q4 2026, down from 78% a year earlier, as custom chips with more memory account for a larger share of sales.
What Broadcom Forecasts For Fiscal Q4 2026
Management expects Broadcom’s growth to pick up again in fiscal Q4 2026, forecasting revenue of $34.8 billion for the quarter. This 93% increase from a year earlier is faster than the 85.5% growth Broadcom reported for fiscal Q3 2026. Management expects AI semiconductor revenue to provide $21.7 billion of that total, and said Broadcom has secured the supply to double AI revenue again to about $115 billion in fiscal 2027.
Those sales go to few buyers. Discussing supply limits in substrates and the memory used in AI servers, management said on the call that Broadcom has only six customers to deal with, and it expects Anthropic to become its largest custom chip customer in 2027.
With a P/E close to that of Texas Instruments, a much slower grower, Broadcom’s price appears to assume its growth will not last at this pace. Management forecasts faster growth, not slower, but that growth comes from a handful of customers. Since the call, Broadcom has also moved to help finance two of them: a $63 billion deal to fund AI equipment for Anthropic moved forward on October 27, and Broadcom is weighing a plan to raise more than $50 billion for OpenAI’s chip purchases. Broadcom is expected to report its fiscal Q4 2026 results in December 2026, and its AI semiconductor revenue is the measure to watch.
Does This Mean You Should Act On AVGO?
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