Cramer Names Broadcom “An Undervalued Stock”, Despite Recent Declines

Jim Cramer made his position clear on AVGO the morning after Broadcom’s Q1 fiscal 2026 earnings hit the tape: “This is an undervalued stock versus where people thought it was going to be.” The stock had just posted record quarterly revenue, AI sales more than doubled year-over-year, and management authorized a fresh $10 billion buyback. Yet the shares were still sitting roughly 18% below their December peak. Cramer’s read was that the market hadn’t caught up to the fundamentals. The question worth answering is whether the math supports him.

The Verdict: Cramer Is Right, But With a Catch

The case for undervaluation rests on a specific framework called the PEG ratio, which stands for Price-to-Earnings-to-Growth. It’s one of the most useful tools for evaluating whether a high-multiple growth stock is actually expensive or just looks that way. The formula divides the forward P/E ratio by the expected earnings growth rate. A PEG ratio below 1.0 is generally considered…