Broadcom Stock Down 21%,Time to Buy?
Broadcom (AVGO) stock has fallen by 21.1% in less than a month, from $412.97 on 10th Dec, 2025 to $326.02 now. Should you buy this dip?
Dip buying is a viable strategy for quality stocks that have a history of recovering from dips. As it turns out, AVGO stock passes basic quality checks. Historically, the median return for the 12-month period following sharp dips was 119% , with median peak return reaching 153%. We define sharp dip as stock going down 30% or more, in less than 30 day period.
Below, we get into details of historical dips and subsequent returns.
Historical Median Returns Post Dips
- Oil-Dri Earnings: Record Sales Tempered By Margin Compression
- Cadre Earnings: Acquisition-Fueled Guidance Overshadows A Significant Quarterly Miss
- Netskope Earnings: Strong Growth And First Positive Free Cash Flow Year
- Guardian Pharmacy Earnings: Margin Expansion And Raised Guidance Signal Operational Strength
- UiPath Earnings: Profitability Inflection Signals A Disciplined AI-Powered Future
- UiPath Earnings: Profitability Inflection Signals A Disciplined AI-Powered Future
| Period | Past Median Return |
|---|---|
| 1M | 25.6% |
| 3M | 56.7% |
| 6M | 93.2% |
| 12M | 119.1% |
Historical Dip-Wise Details
AVGO had 2 events since 1/1/2010 where the dip threshold of -30% within 30 days was triggered
- 153% median peak return within 1 year of dip event
- 298 days is the median time to peak return after a dip event
- -14% median max drawdown within 1 year of dip event
| 30 Day Dip | AVGO Subsequent Performance | |||||||
|---|---|---|---|---|---|---|---|---|
| Date | AVGO | SPY | 1Y | Peak Return |
Max Drop |
# Days to Peak |
||
| Median | 119% | 153% | -14% | 298 | ||||
| 4032025 | -32% | -12% | 123% | 169% | -5% | 251 | ||
| 3122020 | -31% | -24% | 116% | 136% | -23% | 344 | ||
Broadcom Passes Basic Financial Quality Checks
Revenue growth, profitability, cash flow, and balance sheet strength need to be evaluated to reduce the risk of a dip being the sign of a deteriorating business situation.
| Quality Metrics | Value | Quality Check |
|---|---|---|
| Revenue Growth (LTM) | 28.0% | Pass |
| Revenue Growth (3-Yr Avg) | 24.0% | Pass |
| Operating Cash Flow Margin (LTM) | 42.4% | Pass |
| Leverage (see below) | – | Pass |
| => Interest Coverage Ratio | 6.8 | |
| => Cash To Interest Expense Ratio | 3.2 |
Not sure if you can take a call on AVGO stock? Consider portfolio approach
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