By Trefis Team
Publication Date: 2026-05-30 13:08:00
This is a year of extreme acceleration for Broadcom. The company’s engine is its deep, multi-year collaboration to build custom AI chips for just six strategic customers.
That AI-specific business is surging, while the company’s other semiconductor and software segments remain largely flat. To secure this growth, management has pre-emptively locked in its supply of critical components for the next several years.
Is the market pricing in that story reasonably at 84.8x trailing earnings? One clean way to test it is to compute the revenue growth implied by AVGO’s current multiple and see whether the number lines up with how the business actually runs. Before we can get to that number, though, a few assumptions have to be locked in.
The Three Conditions
For AVGO’s stock price to make sense, three things have to play out. These are not predictions. They are what today’s price is implicitly requiring:
- Condition…