AVGO Stock Overview
Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$468.68|
|52 Week High||US$677.76|
|52 Week Low||US$462.00|
|1 Month Change||-14.81%|
|3 Month Change||-7.94%|
|1 Year Change||-7.18%|
|3 Year Change||70.96%|
|5 Year Change||93.24%|
|Change since IPO||2,796.66%|
Recent News & Updates
Broadcom: Networking Segment Driving Double-Digit Revenue Growth
Summary We projected Broadcom's Ethernet switch product revenue growth at an average of 22.2% through 2026 based on unit and ASP growth following the launch of its industry-first 51.2Tbps Tomahawk 5. As the company plans to introduce its co-packaged optics leveraging its silicon photonics portfolio with its Ethernet chips, we projected its growth based on the market CAGR of 25%. We broke down its Networking segment into its 4 main product groups and projected its total segment revenue growth at 17.4% through 2026 driven by Ethernet and optics growth. Following the recent announcement of Broadcom Inc’s (NASDAQ:AVGO) first shipments of its next-gen Tomahawk 5 switch chips, we analyzed Broadcom’s networking segment which represented 26% of its total revenue. According to Broadcom, the company claims that its new Ethernet switch chip has double the bandwidth capability of its competitors. We looked into Broadcom’s Ethernet switch chip portfolio which includes its Tomahawk, Trident, and Jericho lineup and determine whether it has a performance advantage against competitors including Nvidia (NVDA) and Marvell (MRVL). Moreover, we examined the pricing differences between Broadcom’s different product generations of its Ethernet switch chips and projected its revenue growth based on pricing growth and unit shipments growth. Furthermore, we looked into Broadcom’s new Ethernet chips which are co-packaged with its silicon photonics and their benefits to customers. We also compared its silicon photonics capabilities with competitors and projected its revenue growth. Finally, we broke down the company’s Networking business segment into its main product groups besides Ethernet switch and optic products including ASICs and embedded processors and identified its common customer base of enterprise and data center customers. Based on an estimated revenue breakdown of the company’s networking segment, we projected its revenue growth by each product group to forecast its total Networking semiconductor business growth. Broadcom, Khaveen Investments Semicon Breakdown % 2020 2021 Networking 6,044 6,930 Growth % 14.7% Storage 2,418 3,057 Growth % 26.5% Wireless 5,353 6,523 Growth % 21.8% Broadband 2,418 3,261 Growth % 34.9% Total 16,232 19,772 Growth % 21.8% Source: Broadcom, Khaveen Investments Based on the company’s Networking segment revenue in 2021, we broke down its segment by its main product groups which are Ethernet switches, optics, ASICs and embedded processors. For its Ethernet switch revenue, we estimated this based on its market share of 70% of the Ethernet switch chip market estimated to be valued at $3.65 bln in 2021 based on the market CAGR of 10.3% by Market Research Future. Whereas we estimated its optics revenue based on the market size of $10.94 bln and the company’s share of 14% by Yole Development. Moreover, for its ASICs revenue, we based it on the midpoint of JPMorgan (JPM) estimates of the company’s ASICs revenue of between $2 bln to $2.5 bln with the market forecasted to grow between 12% to 15%. Lastly, for its embedded processors revenue, we calculated it as the remainder of its total networking revenue less Ethernet switch, optics and ASICs revenue. Company Data, JP Morgan, Yole Development, Khaveen Investments Superior Ethernet Switch Product Performance Advantage Recently, Broadcom announced that it had recently shipped its first Tomahawk 5 switch series. According to the company, it claims that its products offer double the bandwidth of its competitors and has doubled its product bandwidth every two years with each new product launch. Providing 51.2 Terabits/sec of Ethernet switching capacity in a single, monolithic device, double the bandwidth of any other switch silicon available on the market today. – Broadcom Broadcom had dominated with a market share of 80% of the $3 bln Ethernet switch chip market according to Linley but its market share had eroded from 94.5% in 2015 and is believed to have further declined to 70%. Whereas newer entrants such as Innovium and Mellanox (acquired by Nvidia) are its competitors with Nvidia accounting for 26% of the market based on our estimates derived from the revenue breakdown of its Ethernet segment. To determine Broadcom’s claim, we looked at a total of 27 product models from Broadcom, Nvidia and Marvell across 10 years and compared Broadcom’s Ethernet switch chips with its competitors including Marvell, which acquired Innovium and Nvidia through its Mellanox acquisition, based on their product bandwidth and Gigabit Ethernet speed. Company Data, Khaveen Investments Broadcom offers 3 main switch chip product families including Tomahawk for hyperscale data centers, Trident for enterprise and Jericho for carriers/service provider networks. Based on the table above, Broadcom’s Tomahawk bandwidth had been doubling with every new product launch since 2014. Its latest Tomahawk series offer 51.2Tbps of bandwidth capability with 800 GbE. Though, Nvidia’s Spectrum 4 also has 51.2 Tbps of bandwidth capability and 800 GbE, which is in contrast with Broadcom’s claim as the only product with 51.2 Tbps bandwidth. However, Nvidia’s 51.2 Tbps product is only expected to start shipping in 2023 according to the company. In comparison, Marvell’s Teralynx 8 product only has 25.6 Tbps bandwidth as it was launched in 2021. Thus, we believe that while Broadcom has a wider portfolio and is the first to launch its 51.2 Tbps Ethernet switch chip, we expect it to face competition from Nvidia which is expected to start shipping its new chip in 2023. One aspect of the new Tomahawk 5 chip is the integration with RDMA over Converged Ethernet ((RoCE)) technology. According to Mellanox, RoCE is a network protocol that leverages Remote Direct Memory Access (RDMA) capabilities to dramatically accelerate communications between applications hosted on clusters of servers and storage arrays. The incorporation of RoCE is claimed to result in lower latency, higher throughput, and better performance. Nvidia had leverage on RoCE from Mellanox which is called Nvidia Infiniband. Thus, we believe that the incorporation of RoCE for Broadcom could provide it an opportunity to close the advantage gap that Nvidia has had. Moreover, we compared Broadcom’s Ethernet switch chips product pricing across different product generations to calculate its pricing difference. According to Broadcom, for its Tomahawk 4 chips, 6 12.8Tbps chips are needed to create the bandwidth of the Tomahawk 4 (25.6Tbps). Another way of saying that is that the Tomahawk 4 can cost six times much as the Tomahawk 3 and still have space, thermal, resiliency, and huge latency advantages to deliver the same raw bandwidth that is carved up into ports. – The Next Platform Broadcom is not providing specific pricing for its chips, and it is an incorrect assumption that Broadcom will charge the same price for the Tomahawk 4 as it did for the Tomahawk 3. On the contrary, with these improvements, we expect that Broadcom will be able to charge more for the ASIC (but far less than 2X of course) – probably on the order of 25 percent to 30 percent more for that 2X increase in throughput and reduction in latency. - The Next Platform Broadcom Ethernet Chip BCM56960 BCM56970 BCM56980 Average Price ($) 4,128 4,308 6,384 Growth % 4.4% 48.2% 26.3% Source: Avnet, Khaveen Investments We obtained the price of Broadcom’s past 3 Tomahawk chip models from Tomahawk 1 to 3 from Avnet due to limited information provided from the company’s websites which shows an average price increase of 26.3%. Broadcom Ethernet Switch Revenue ($ mln) 2022F 2023F 2024F 2025F 2026F Unit Shipment Growth % 8% 8% 8% 8% 8% ASP Growth % 13.1% 13.1% 13.1% 13.1% 13.1% Revenue Growth % 22.2% 22.2% 22.2% 22.2% 22.2% Broadcom Ethernet Switch Revenue 3,057 3,735 4,564 5,576 6,813 Source: Omdia, Khaveen Investments Thus, we that while the company had launched the industry's first 51.2 Tbps switch product, we expect it to face competition from Nvidia in the future but could close its technological gap with Nvidia’s Infiniband with the integration of its RoCE technology. We projected the company’s Ethernet switch chip revenue growth based on the market forecast switch silicon units CAGR of 8% by IHS and ASP growth based on our derived average of Broadcom’s past products generations but divided by 2 to account for its product launch which is every 2 years. In total, we projected its Ethernet switch chip revenue to grow at an average of 22.2% through 2026. New Ethernet Chips Leverage on its Silicon Photonics According to Broadcom, Co-Packaged Optics (CPO) is an advanced heterogeneous integration of optics and silicon on a single packaged substrate aimed at addressing next-generation bandwidth and power challenges. CPO brings together a wide range of expertise in fiber optics, digital signal processing (DSP), switch ASICs, and state-of-the-art packaging & test to provide disruptive system value for the data center and cloud infrastructure. Whereas according to GazetteByte, co-packaged optics brings together optics and the chip in one package. Broadcom highlights several performance advantages of using co-packaged optics. According to Broadcom, it reduces power consumption by 30% and the cost-per-bit by 40% compared to using pluggable optics. Further, Co-packaged optics also double rack density bandwidth. Additionally, leveraging Broadcom’s leading-edge silicon photonics and packaging technologies, Tomahawk 5 will be made available with co-packaged optics using Broadcom’s Silicon Photonics Chiplets in Package (SCIP) platform, providing a more than 50 percent decrease in the power needed for optical connectivity. Since the same switch silicon provides all these options, customers can choose the optimal I/O for each part of their intra-cluster, inter-cluster, and inter-DC networks with no software porting required. – Broadcom Furthermore, Broadcom and Tencent (OTCPK:TCEHY, OTCPK:TCTZF) announced a strategic partnership to “accelerate the adoption of high bandwidth co-packaged optics (CPO) network switches for cloud infrastructure”. Under this partnership, Broadcom will
When Should You Buy Broadcom Inc. (NASDAQ:AVGO)?
Let's talk about the popular Broadcom Inc. ( NASDAQ:AVGO ). The company's shares saw significant share price movement...
|AVGO||US Semiconductor||US Market|
Return vs Industry: AVGO exceeded the US Semiconductor industry which returned -29.7% over the past year.
Return vs Market: AVGO exceeded the US Market which returned -23.1% over the past year.
|AVGO Average Weekly Movement||4.4%|
|Semiconductor Industry Average Movement||8.1%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.8%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: AVGO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: AVGO's weekly volatility (4%) has been stable over the past year.
About the Company
Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing merchant silicon products; embedded processors and controllers; serializer/deserializer application specific integrated circuits; optical and copper, and physical layers; and fiber optic transmitter and receiver components.
Broadcom Fundamentals Summary
|AVGO fundamental statistics|
Is AVGO overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|AVGO income statement (TTM)|
|Cost of Revenue||US$7.88b|
Last Reported Earnings
Jul 31, 2022
Next Earnings Date
|Earnings per share (EPS)||24.26|
|Net Profit Margin||31.02%|
How did AVGO perform over the long term?See historical performance and comparison
3.5%Current Dividend Yield
Is AVGO undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 4/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for AVGO?
Other financial metrics that can be useful for relative valuation.
|What is AVGO's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does AVGO's PE Ratio compare to its peers?
|AVGO PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
TXN Texas Instruments
MU Micron Technology
Price-To-Earnings vs Peers: AVGO is expensive based on its Price-To-Earnings Ratio (19.3x) compared to the peer average (9.8x).
Price to Earnings Ratio vs Industry
How does AVGO's PE Ratio compare vs other companies in the US Semiconductor Industry?
Price-To-Earnings vs Industry: AVGO is expensive based on its Price-To-Earnings Ratio (19.3x) compared to the US Semiconductor industry average (15.7x)
Price to Earnings Ratio vs Fair Ratio
What is AVGO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||19.3x|
|Fair PE Ratio||28.5x|
Price-To-Earnings vs Fair Ratio: AVGO is good value based on its Price-To-Earnings Ratio (19.3x) compared to the estimated Fair Price-To-Earnings Ratio (28.5x).
Share Price vs Fair Value
What is the Fair Price of AVGO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: AVGO ($468.68) is trading below our estimate of fair value ($649.46)
Significantly Below Fair Value: AVGO is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
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How is Broadcom forecast to perform in the next 1 to 3 years based on estimates from 25 analysts?
Future Growth Score2/6
Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: AVGO's forecast earnings growth (8.9% per year) is above the savings rate (1.9%).
Earnings vs Market: AVGO's earnings (8.9% per year) are forecast to grow slower than the US market (14.7% per year).
High Growth Earnings: AVGO's earnings are forecast to grow, but not significantly.
Revenue vs Market: AVGO's revenue (5.2% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: AVGO's revenue (5.2% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: AVGO's Return on Equity is forecast to be very high in 3 years time (65.2%).
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How has Broadcom performed over the past 5 years?
Past Performance Score5/6
Past Performance Score 5/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: AVGO has high quality earnings.
Growing Profit Margin: AVGO's current net profit margins (31%) are higher than last year (21.7%).
Past Earnings Growth Analysis
Earnings Trend: AVGO's earnings have grown by 3% per year over the past 5 years.
Accelerating Growth: AVGO's earnings growth over the past year (70.6%) exceeds its 5-year average (3% per year).
Earnings vs Industry: AVGO earnings growth over the past year (70.6%) exceeded the Semiconductor industry 49.3%.
Return on Equity
High ROE: Whilst AVGO's Return on Equity (48.44%) is outstanding, this metric is skewed due to their high level of debt.
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How is Broadcom's financial position?
Financial Health Score3/6
Financial Health Score 3/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: AVGO's short term assets ($15.6B) exceed its short term liabilities ($6.7B).
Long Term Liabilities: AVGO's short term assets ($15.6B) do not cover its long term liabilities ($43.7B).
Debt to Equity History and Analysis
Debt Level: AVGO's net debt to equity ratio (140.9%) is considered high.
Reducing Debt: AVGO's debt to equity ratio has increased from 60.1% to 188.7% over the past 5 years.
Debt Coverage: AVGO's debt is well covered by operating cash flow (39.8%).
Interest Coverage: AVGO's interest payments on its debt are well covered by EBIT (7.4x coverage).
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What is Broadcom current dividend yield, its reliability and sustainability?
Dividend Score 5/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: AVGO's dividend (3.5%) is higher than the bottom 25% of dividend payers in the US market (1.65%).
High Dividend: AVGO's dividend (3.5%) is low compared to the top 25% of dividend payers in the US market (4.57%).
Stability and Growth of Payments
Stable Dividend: AVGO's dividends per share have been stable in the past 10 years.
Growing Dividend: AVGO's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonable payout ratio (68.3%), AVGO's dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its reasonably low cash payout ratio (43.4%), AVGO's dividend payments are well covered by cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Hock Tan (70 yo)
Mr. Hock E. Tan has been President, Chief Executive Officer and Director at Broadcom Inc. since March 2006. Mr. Tan is President, Chief Executive Officer and Director at Broadcom Corporation and Broadcom T...
CEO Compensation Analysis
Compensation vs Market: Hock's total compensation ($USD60.70M) is above average for companies of similar size in the US market ($USD13.05M).
Compensation vs Earnings: Hock's compensation has increased by more than 20% in the past year.
Experienced Management: AVGO's management team is considered experienced (4.9 years average tenure).
Experienced Board: AVGO's board of directors are considered experienced (4.8 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
|29 Mar 22||SellUS$3,150,025||Kirsten Spears||Individual||5,000||US$636.23|
|25 Mar 22||SellUS$124,934||Gayla Delly||Individual||200||US$624.67|
|24 Mar 22||SellUS$6,840,540||Mark Brazeal||Individual||11,214||US$610.00|
|24 Mar 22||SellUS$1,562,113||Charlie Kawwas||Individual||2,520||US$619.89|
|16 Mar 22||SellUS$8,113,929||Thomas Krause||Individual||13,863||US$586.11|
|10 Mar 22||BuyUS$39,610||Raul Fernandez||Individual||68||US$585.00|
|09 Mar 22||BuyUS$58,564||Raul Fernandez||Individual||100||US$588.79|
|22 Dec 21||SellUS$1,291,066||Charlie Kawwas||Individual||2,000||US$645.53|
|21 Dec 21||SellUS$1,296,200||Kirsten Spears||Individual||2,000||US$648.10|
|16 Dec 21||BuyUS$99,691||Raul Fernandez||Individual||159||US$629.00|
|16 Dec 21||SellUS$2,306,702||Thomas Krause||Individual||3,645||US$632.84|
|15 Dec 21||BuyUS$99,436||Raul Fernandez||Individual||162||US$615.00|
|15 Dec 21||SellUS$171,541||Harry You||Individual||276||US$621.53|
|29 Sep 21||BuyUS$74,409||Raul Fernandez||Individual||152||US$489.54|
|27 Sep 21||SellUS$1,587,890||Mark Brazeal||Individual||3,150||US$504.09|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Broadcom Inc.'s employee growth, exchange listings and data sources
- Name: Broadcom Inc.
- Ticker: AVGO
- Exchange: NasdaqGS
- Founded: 2018
- Industry: Semiconductors
- Sector: Semiconductors
- Implied Market Cap: US$189.816b
- Shares outstanding: 405.00m
- Website: https://www.broadcom.com
Number of Employees
- Broadcom Inc.
- 1320 Ridder Park Drive
- San Jose
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|0YXG||LSE (London Stock Exchange)||Yes||Common Stock||GB||USD||Aug 2009|
|1YD||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Aug 2009|
|AVGO *||BMV (Bolsa Mexicana de Valores)||Yes||Common Stock||MX||MXN||Aug 2009|
|BROA||WBAG (Wiener Boerse AG)||Yes||Common Stock||AT||EUR||Aug 2009|
|AVGO||NasdaqGS (Nasdaq Global Select)||Yes||Common Stock||US||USD||Aug 2009|
|1YD||ETLX (Eurotlx)||Yes||Common Stock||IT||EUR||Aug 2009|
|AVGO34||BOVESPA (Bolsa de Valores de Sao Paulo)||BDR EACH 35 REP 1 COM||BR||BRL||May 2019|
|AVGO.P||NasdaqGS (Nasdaq Global Select)||8% MCNV PFD SR A||US||USD||Sep 2019|
|AVGO||BASE (Buenos Aires Stock Exchange)||CEDEAR EACH 39 REPR 1 COM||AR||ARS||Mar 2021|
|AVGOD||BASE (Buenos Aires Stock Exchange)||CEDEAR EACH 39 REPR 1 COM||AR||USD||Mar 2021|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/24 00:00|
|End of Day Share Price||2022/09/23 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.