Broadcom's dual AI engines, consisting of custom ASICs and dominant networking chips, capture hyperscaler capital from both sides, creating utility-like lock-in over semiconductor cyclicality. AVGO trades at 21x forward earnings with a PEG of 0.44, offering a cheaper entry than NVDA while carrying a 15-year dividend growth streak. Hock Tan guides $56 billion in AI revenue this year and targets $100 billion by 2027, backed by gigawatt commitments from Meta, OpenAI, and Anthropic.
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Broadcom (NASDAQ:AVGO) closed at $392.99 last Friday, down 8.13% in a week and 5.94% on the session. To me that reads as an invitation to add. Broadcom sells two things every hyperscaler now needs: custom silicon (ASIC) co-designed with the customer alongside dominant high-speed switching silicon (Tomahawk and Jericho) that lashes those chips together into working clusters.
When Google, Meta, OpenAI, or Anthropic decides to build proprietary AI hardware to escape GPU pricing, they still buy the networking from Broadcom. This dual-engine strategy captures AI capital expenditure from both sides, and enterprise lock-in here reads more like a utility than semiconductor cyclicality. Q2 FY2026 revenue hit $22.19 billion, up 47.9% YoY, with AI semiconductor revenue of $10.80 billion, up 143%.
Management guides Q3 to $29.4 billion in total revenue and $16 billion in AI semi, over 200% YoY growth. Hock Tan expects full-year fiscal 2026 AI semi revenue of $56 billion, and he has reiterated the company is on track to exceed $100 billion in AI sales in 2027. AI bookings have passed $30 billion against $10.8 billion shipped, and visibility now runs to 2028.
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