Broadcom Stock Price Forecast - AVGO Near $336 Rides Hyperscaler AI Capex Wave and $162 Billion Backlog

Broadcom Stock (NASDAQ:AVGO) – AI Infrastructure Engine Behind Hyperscaler Capex

Broadcom (NASDAQ:AVGO) – Current price, valuation and what the tape is saying

Broadcom stock (NASDAQ:AVGO) trades around $336–$337 today after moving between roughly $329.58 and $340.11 in the session, versus a 52-week range of about $138.10 to $414.61 and a market value of roughly $1.6 trillion. The stock changes hands at a trailing P/E near 70–71x with a cash dividend yield around 0.8%, so the market is clearly paying for multi-year AI infrastructure growth rather than income. At this valuation level, the bar for execution is high, but it reflects a business that already delivered FY25 revenue of about $63.9 billion and net income around $23.1 billion, with management pointing to roughly $19+ billion revenue just for Q1 FY26 and AI-related semiconductor revenue alone guided to $8.2 billion for that quarter.

AI capex from hyperscalers – why Broadcom sits at the center of the 2026 spending wave

The core equity story in Broadcom (NASDAQ:AVGO) is simple and aggressive: hyperscalers are expanding 2026 capital expenditure at a pace that would have looked unrealistic two years ago, and Broadcom is wired into that cycle at multiple points. Estimates for 2026 capex show some of the largest cloud platforms pushing spend into the $175–$200 billion area individually, with expectations that combined hyperscaler AI and data-center budgets will climb more than 70% versus prior years. That is not generic IT spending; it is targeted at GPUs, custom accelerators, networking gear and infrastructure software where Broadcom already has design wins and long-term contracts. Behind those capex plans sits a cloud backlog north of $1.6 trillion across major players, with about $1.1 trillion attributed to the three largest US hyperscalers. Broadcom closed Q4 FY25 with a total backlog of about $162 billion, of which roughly $73 billion is tied directly to AI-related products scheduled to ship over the next 18 months. That backlog visibility provides unusually strong line-of-sight on future revenue for a semiconductor name and is the key reason the stock can sustain a premium multiple without the market assuming blue-sky scenarios.

Custom silicon, TPUs and XPUs – content expansion rather than just unit growth

The AI acceleration leg is not limited to buying more of the same generic chips. The cloud giants are pivoting towards custom silicon to cut cost per token, reduce power consumption and avoid single-supplier dependency. Broadcom (NASDAQ:AVGO) sits directly in this lane by designing and supplying custom TPUs and XPUs tuned to each cloud platform. Recent disclosed and inferred deals include multi-billion-dollar arrangements with AI developers and cloud providers, including an aggregate of more than $20 billion of TPU orders associated with Anthropic that are slated to flow through into late 2026. On the technical side, Broadcom’s XPUs and AI accelerators are built around high-bandwidth memory (HBM) architectures and advanced packaging, allowing hyperscalers to optimize inference workloads at lower cost than running everything on premium GPUs. The economics matter: when a generic accelerator can cost $40,000–$50,000 per unit, a custom device at $10,000–$15,000 with better power efficiency becomes compelling once you scale to tens of thousands of chips. That price gap is exactly where Broadcom extracts value. As AI usage shifts from a training-heavy cycle to one dominated by inference and real-time workloads for billions of users, custom silicon penetration is likely to rise, increasing Broadcom’s content per server even if unit growth moderates.

Networking dominance – why the “network is the computer” for AVGO’s AI thesis

AI data centers no longer scale only by adding more servers; the real bottleneck is moving data in and out of those accelerators quickly enough. That is where Broadcom’s networking franchise is critical. Products like Tomahawk and Jericho switches give Broadcom (NASDAQ:AVGO) an 80–90% share in the high-end data-center switching market, especially in Ethernet-based AI fabrics that hyperscalers are adopting instead of proprietary interconnects. Modern AI clusters can require five to ten times more network ports and switching density per rack than legacy scale-out architectures, because hundreds or thousands of accelerators need to operate as a single logical unit. Internal studies at large platforms have already shown that networking bottlenecks can leave accelerators idle more than 30% of the time if the fabric is not optimized. When AI models evolve from simple text to multimodal workloads with video, audio and large context windows, the data-movement requirement jumps again, and the economic value shifts further towards whoever owns the most efficient switching, routing and interconnect stack. Broadcom’s ability to supply both the physical switches and the associated low-latency software stack gives it direct leverage as each new AI model requires another turn of infrastructure upgrades.

Infrastructure software and VMware – high-margin layer that locks in AVGO’s position

On top of chips and networking, Broadcom (NASDAQ:AVGO) runs a high-margin infrastructure software segment anchored by VMware, which produced roughly $27 billion of revenue in FY25 with gross margins around 93%, outgrowing even the semiconductor segment. This business is not consumer SaaS that can be swapped overnight; it controls how compute, storage and networking resources are virtualized and orchestrated across private and hybrid clouds. VMware Cloud Foundation 9.0 is designed to unify the stack around AI workloads, with features like NVMe-based memory tiering and kernel optimizations that can deliver up to 3x faster data throughput and lower latency for AI and ML jobs. The practical outcome is that large enterprises and cloud operators can run GPU, XPU and TPU clusters from multiple vendors under a single, hardened management layer instead of relying on a patchwork of tools. Renewal rates above 90% for high-value VMware customers demonstrate the switching costs; ripping this layer out of a production data center that has billions of dollars of hardware sitting underneath it is not something management teams accept lightly. For Broadcom, that means a recurring software cash engine that complements the more cyclical hardware lines and supports long-term free-cash-flow growth.

Financial profile, free cash flow and balance sheet discipline

Financially, Broadcom (NASDAQ:AVGO) is already operating at a scale that many AI narratives still promise for the future. FY25 revenue came in near $63.9 billion, with net income around $23.1 billion, driven by both the semiconductor solutions segment and the software stack. Free cash flow reached roughly $26.9–$27.0 billion, up from about $19.4 billion the prior year, putting free-cash-flow margin above 40% of sales. Unlike some peers that have levered up aggressively to chase AI demand, Broadcom has been taking debt down, cutting long-term borrowings by more than $4 billion and reducing total long-term liabilities by more than $8 billion over the last reported year. That balance-sheet discipline gives management room to keep raising the dividend at a double-digit pace and continue targeted buybacks while still funding R&D, custom-silicon programs and potential bolt-on deals. The current dividend yield below 1% looks modest, but on free-cash-flow coverage it is conservative, leaving the bulk of cash to reinvest in the AI infrastructure build-out.

Valuation, sentiment and positioning call on Broadcom stock (NASDAQ:AVGO)

At around $336–$337, Broadcom (NASDAQ:AVGO) trades near 39–40x EV/EBITDA on forward numbers cited in institutional models, above its one-year mid-range but not extreme relative to the growth profile. Some analysts project FY26 revenue in the high-$70 billions and free cash flow in the low-$30 billions, with more aggressive scenarios pushing FCF potential beyond $60 billion later in the decade if hyperscaler AI capex tracks current multi-year plans. That would compress the free-cash-flow yield from today’s roughly 2% into a much more attractive range without requiring multiple expansion, assuming Broadcom converts backlog into shipments as indicated. Recent price action shows that even with strong fundamentals, sentiment remains sensitive to macro concerns about AI capex bubbles, memory supply tightness and cyclicality in semis. Pullbacks from the $400+ area down towards the low $300s have already given entry windows where the stock looks more like “growth at a reasonable price” rather than a momentum trade. Given the current price zone, the breadth of the AI infrastructure franchise and the visibility from a $162 billion backlog and $73 billion AI book, the stance on Broadcom stock (NASDAQ:AVGO) is bullish with a clear bias to Buy, accepting volatility around AI headlines in exchange for direct exposure to the capex core of this cycle rather than just the front-end model providers.

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