Dear Broadcom Stock Fans, Mark Your Calendars for August 31

Artificial intelligence (AI) has turned infrastructure into the hottest corner of enterprise tech, and companies now want more than faster chips. They need networking, cloud software, and systems that actually work together. That puts Broadcom (AVGO) in a sweet spot, with its AI semiconductors on one side and VMware strengthening its enterprise software business on the other.

So, Monday, Aug. 31, deserves a spot on the calendar. VMware Explore 2026 is kicking off in Las Vegas with 400-plus technical sessions, hands-on labs, and certifications around VMware Cloud Foundation. Broadcom and its customers will also showcase private AI clouds and agentic AI, giving enterprises a closer look at where VMware is headed.

The real prize here is adoption. If Explore gets more IT teams comfortable with VMware Cloud Foundation, Broadcom can turn technical interest into bigger deployments and stickier customer relationships. More people trained on the platform also makes it easier for enterprises to build private AI environments around VMware. 

Hence, stronger VMware adoption adds another layer to Broadcom’s growth. More enterprise customers using the platform can lift the firm’s software revenue, improve recurring cash flow, and give the company more room to cross-sell across its infrastructure portfolio. If that growth shows up in earnings, investors might reward AVGO stock with a stronger stock performance.

About Broadcom Stock 

Headquartered in Palo Alto, California, Broadcom is a leading global technology company providing semiconductor and infrastructure software solutions that power critical digital infrastructure.

With a market cap of nearly $1.8 trillion, Broadcom’s semiconductor portfolio serves AI, networking, connectivity, storage, broadband, and telecommunications. Meanwhile, its software businesses, including VMware, Symantec, and CA Technologies, support enterprise cloud, cybersecurity, and IT management.

Broadcom’s shares have delivered a notable performance. The stock climbed 19.5% over the past 52 weeks and gained 6.6% on a year-to-date (YTD) basis. Over the last six months alone, shares have surged 15.4%, extending an already impressive run.

From a valuation perspective, AVGO stock is trading at a premium, with the shares valued at 31.71 times forward adjusted earnings and 16.54 times sales. Both multiples sit comfortably above the broader industry average and also exceed their respective five-year historical multiples, reflecting elevated expectations for future growth.

Moreover, Broadcom has increased its dividend for 15 consecutive years. The company currently pays an annual dividend of $2.60 per share, translating into a dividend yield of 0.71%. Its most recent quarterly dividend, totaling $0.65 per share, was distributed on June 30 to shareholders of record as of June 22.

Broadcom Surpasses Q2 Earnings

On June 3, Broadcom reported its Q2 FY2026 earnings, with results coming in ahead of Wall Street’s expectations. Revenue increased 47.9% year-over-year (YoY) to $22.19 billion, surpassing analyst estimates of $22.06 billion. Non-GAAP EPS rose 54.4% from the year-ago value to $2.44, beating the Street's forecast of $2.40.

Semiconductor revenue reached a record $15 billion in Q2, representing a 78.5% YoY increase. AI semiconductor revenue provided the biggest lift, reaching a record $10.8 billion, up 143% YoY and above management’s outlook. During the quarter, AI semiconductor bookings also exceeded $30 billion, compared with the $10.8 billion shipped.

The momentum is expected to strengthen further in Q3, when AI semiconductor revenue is projected to accelerate to $16 billion, up over 200% YoY. For the full year 2026, Broadcom expects AI semiconductor revenue to reach $56 billion, approximately 180% above fiscal 2025. Moreover, management expects that momentum to carry into FY2027 and has reiterated guidance for AI semiconductor revenue exceeding $100 billion. 

Delving deeper, operating margin expanded 200 basis points YoY to 67.3%, while operating expenses remained relatively flat. Adjusted EBITDA reached $15.2 billion, or 69% of revenue, exceeding the company’s guidance of 68%. Meanwhile, non-GAAP net income rose 55.1% from the previous year’s quarter value to $12.1 billion.

Cash generation was equally notable. Free cash flow reached a quarterly record of $10.3 billion, while the company spent $231 million on capital expenditures. Furthermore, Broadcom ended the quarter with $19.6 billion in cash, compared with $14.2 billion in the prior quarter, and held $4.33 billion in inventory as it continued securing supply for strong AI demand.

Building on that momentum, management expects Q3 revenue of approximately $29.4 billion, with non-GAAP operating income projected at approximately 67% of revenue and adjusted EBITDA expected to represent approximately 68% of projected revenue. 

Broadcom is now set to report its Q3 FY2026 financial results after the market closes on Wednesday, Sept. 2. Analysts expect Q3 FY2026 EPS to grow 124.6% YoY to $2.83. For full FY2026, the bottom line is projected to increase 81.9% from the prior year to $10.24. Expectations remain strong for FY2027 as well, with EPS estimated to grow 71.3% to $17.54.

What Do Analysts Expect for Broadcom Stock?

Oppenheimer analyst Rick Schafer has reiterated a “Buy” rating on Broadcom while maintaining a $535 price target for AVGO stock. That bullish stance likely reflects the company’s exposure to AI infrastructure, strong demand for custom accelerators and networking chips, recurring software revenue, and the potential benefits of continued data center spending.

Wall Street’s broader view is similarly constructive, assigning AVGO stock an overall “Strong Buy” rating. Of the 42 analysts covering the name, 33 recommend a "Strong Buy," three give it a "Moderate Buy," and six rate the stock a "Hold."

Against that backdrop, the stock’s average price target of $517.31 represents a potential upside of 40.3%. Meanwhile, the Street-high target of $675 suggests a gain of 83% from current levels.