Broadcom Stock Price Forecast AVGO Stock Sinks to $324 After $414 Peak – Is $390 the Next Target?

Broadcom NASDAQ:AVGO – AI Drawdown Or $325 Entry Point?

Broadcom NASDAQ:AVGO – From $414 Peak To A $325–$340 Reset

NASDAQ:AVGO has dropped from about $412.97 on December 10 to roughly $325–$340, a decline of around 15–20% in a few sessions, even as the company delivers one of the strongest AI infrastructure prints in the market. Over the last twelve months, Broadcom has generated approximately $60–64 billion in revenue, growing about 24–28% year-on-year, with the latest quarter at roughly $18.0 billion, up 28.2% YoY. Adjusted EBITDA margin in Q4 stands near 67–68%, with quarterly adjusted EBITDA around $12.2 billion and free cash flow about $7.5 billion, roughly 41% of revenue; full-year free cash flow is about $26.9 billion.
At a share price near $325 and a market capitalization close to $1.5–1.7 trillion, NASDAQ:AVGO trades at a trailing P/E ~68x and a forward non-GAAP P/E ~34x based on FY26 EPS around $10.06, with a PEG ratio near 1.2x compared with a sector median closer to 1.7x. Revenue has compounded at roughly 24% annually over three years, while operating margin is near 39% and net margin about 31–32%, versus S&P 500 averages closer to 19% operating and 13% net. With an operating cash-flow margin around 42–43%, a debt-to-equity ratio near 5%, and capex of only about $237 million (roughly 1.3% of revenue), Broadcom is a high-margin, cash-rich AI infrastructure name, but at a valuation where sentiment shifts translate into violent price moves.

Broadcom NASDAQ:AVGO – AI Revenues At $20B And A $73B Backlog

The growth engine in NASDAQ:AVGO is now AI infrastructure. For FY2025, total revenue is roughly $63.9–64.0 billion, up about 24% year-on-year. Within that, AI semiconductor revenue has reached around $20 billion, growing approximately 65% for the year, with Q4 AI semi revenue alone up about 74% YoY. The semiconductor segment overall is around $37 billion for the year. Infrastructure software, driven by VMware and related products, contributes roughly $27 billion, up about 26% YoY, with operating margins near 78%, acting as a stabilizer for consolidated profitability.
The AI order book is the key anchor for the equity story. Broadcom has disclosed an AI backlog of roughly $73 billion to be delivered over the next 18 months. In the second half of FY2025 it booked approximately $21 billion of XPU custom accelerator orders, with roughly $11 billion in Q4 alone and a new hyperscaler XPU customer adding about $1 billion of incremental demand. On the networking side, orders for Tomahawk 6 102-terabit switches have pushed AI switching backlog above $10 billion, as customers build out high-bandwidth AI networks ahead of accelerator deployment.
Alongside this, the infrastructure software backlog is also around $73 billion, taking total company backlog to roughly $162 billion when AI hardware, networking and software are combined. Roughly 60% of semiconductor revenue is now tied to AI, while non-AI semis, representing about 40% of the semiconductor segment and around 25% of total revenue, remain flat to low-single-digit due to weak enterprise spending. The result is a model where AI drives double-digit consolidated growth, non-AI acts as a drag, and VMware plus infrastructure software smooths the cycle and keeps margins elevated.

Broadcom NASDAQ:AVGO – Asset-Light AI Versus Heavy Data-Center Models

The way NASDAQ:AVGO participates in AI is structurally different from data-center owners. Hyperscalers such as Google, Meta and OpenAI bring Broadcom their workload requirements, Broadcom designs custom accelerators using its own IP and networking portfolio, and fabrication is outsourced to TSMC. Once chips are produced, Broadcom assembles full systems and racks using its own switching products, delivering deployable AI systems tailored to the customer’s requirements.
Because Broadcom does not own and operate the data centers, it avoids the multi-billion dollar capex profiles seen at cloud operators and infrastructure landlords. Recent quarterly capex of about $237 million, roughly 1.3% of revenue, underscores the asset-light nature of the model. That in turn supports free cash flow of around $7.5 billion in Q4 and $26.9 billion for the full year, a free-cash-flow margin near 41%, leaving room for dividends at roughly 0.8% yield, debt reduction and buybacks without stressing the balance sheet.
On networking, Broadcom’s strategy revolves around pushing advanced Ethernet, via products such as Tomahawk 5 and Tomahawk 6, far enough to handle a large share of AI workloads that do not require Nvidia’s highest-end InfiniBand performance. This positions NASDAQ:AVGO as a complementary supplier: hyperscalers keep Nvidia where they need maximum performance while using Broadcom’s Ethernet-based solutions where cost and compatibility matter more than absolute latency, thereby reducing single-vendor risk and optimizing cluster economics.

Broadcom NASDAQ:AVGO – Margin Compression As The Cost Of AI Scale

The recent selloff is driven by guidance around margins rather than by a collapse in demand. Management has been clear that Q1 consolidated gross margin will be down roughly 100 basis points sequentially, primarily because AI revenue, particularly system-level sales that include third-party components such as HBM memory, carries lower gross margins than legacy software and higher-margin semiconductor lines. As the AI mix increases, the gross-margin percentage compresses even though gross-margin dollars and operating-margin dollars continue to rise.
Current profitability levels remain exceptional: operating margin is about 39%, net margin around 31–32%, and adjusted EBITDA margin in Q4 approximately 67%. Even with one to two percentage points of gross-margin compression from mix, the underlying cash-generation engine remains very strong because fixed costs are already covered and incremental AI volumes are highly accretive in absolute dollars. The market is reacting to the change in the shape of the P&L, not to a deterioration in the economics of the business; Broadcom is effectively normalizing from software-skewed margins toward a more balanced AI-hardware/soft­ware mix, not migrating into a low-margin commodity structure.

Broadcom NASDAQ:AVGO – Valuation Reset After AI Panic

Before the correction, NASDAQ:AVGO traded above $400, with a multiple that was starting to price near-perfect AI execution. After the drop into the $320–340 range, the picture looks different. On a trailing basis the stock still shows a P/E near 68x, inflated by integration and AI ramp effects; on a forward non-GAAP basis using FY26 EPS estimates around $10.06, the multiple compresses to roughly 34x. Peer comparisons put Nvidia in the high-30s on forward P/E, AMD above 50x, and Marvell just under 30x. With a PEG ratio around 1.2x against a sector median of about 1.7x, Broadcom now sits in a zone where its growth and backlog justify a premium but not an extreme bubble tag.
The essential shift is that pricing has come down while earnings expectations have been revised upward off the back of the $73 billion AI backlog and steady VMware-driven software cash flow. If AI unit demand remains robust through 2026, a low-30s forward multiple on NASDAQ:AVGO is sustainable, leaving room for the share price to grind back toward and eventually above the $400 region once the market digests the margin mix story and re-focuses on volume and backlog visibility.

Broadcom NASDAQ:AVGO – Technical Setup Around $300 Support

Technically, NASDAQ:AVGO confirms the sentiment reset. The stock has broken below its short-term moving averages around $376 (21-day) and $362 (50-day), signaling weakened momentum. The next major support area is near the 200-day EMA around $298, not far below the current $325 level, while the RSI dropping below 40 for the first time since April points to a transition from overbought to mildly oversold conditions.
Historically the name has tolerated deep swings: during the 2022 inflation shock NASDAQ:AVGO fell around 36.7% before recovering by May 2023, and during the 2020 Covid crash it lost roughly 48.3% before regaining highs by August that same year. In that context, a 15–20% drawdown from the December high is a normal AI re-rating move rather than a structural break. A staged accumulation strategy between $300–340, with capacity to add in a stress scenario closer to $280–300, fits the historical volatility profile, but only for investors comfortable with large, rapid mark-to-market swings.

Broadcom NASDAQ:AVGO – Concentrated AI, Non-AI Drag And Valuation Risk

Key risks from here are concentrated and tangible. AI spending is the first: if hyperscalers decide to slow AI capex to digest the capacity they have already ordered, the $73 billion AI backlog will still exist but growth rates could compress quickly, and the market will discount that forward curve. Customer concentration is the second: a meaningful share of AI revenue depends on a small set of hyperscalers; any shift in their custom silicon strategy, in-house design plans or vendor mix will show up directly in Broadcom’s books.
The non-AI semiconductor business is a third drag. With around 40% of semiconductor revenue and about 25% of consolidated revenue still coming from non-AI segments, ongoing weakness in enterprise spending can dilute overall growth if AI slows simultaneously. Valuation is the fourth risk: even after the pullback, a forward multiple in the low-30s does not leave room for major execution errors. Any disappointment around AI backlog conversion, VMware monetization or margin trajectory will trigger another rapid reset. Debt after VMware is manageable relative to $26.9 billion of annual free cash flow, but an aggressive new acquisition before this deal is fully digested would raise leverage and could be punished by the market.

Broadcom NASDAQ:AVGO – Insider Signals And Capital Allocation Power

For tracking management behavior and potential turning points, the next layer is insider and capital-allocation data. Insider activity, ownership changes and profile details are accessible through NASDAQ:AVGO insider transactions, while broader fundamentals sit in the NASDAQ:AVGO stock profile. With free cash flow near $27 billion and capex just over $1 billion annually, Broadcom has substantial capacity to fund dividend growth above the current 0.8% yield, reduce post-VMware debt, and repurchase stock opportunistically if valuation dislocates further.
Given the scale of the AI backlog and the asset-light model, any announced acceleration in buybacks around the $300–340 band would effectively create a soft floor under NASDAQ:AVGO, provided that AI demand and hyperscaler relationships remain intact. The combination of recurring software cash flow, high-margin AI semis, and disciplined capital allocation is exactly what supports a compounding profile rather than a one-cycle speculative AI trade.

Broadcom NASDAQ:AVGO – Final Stance: High-Volatility Buy On AI Infrastructure

The numbers stack up in favor of a constructive stance on NASDAQ:AVGO at current levels. Revenue around $64 billion growing about 24%, AI revenues near $20 billion growing 65%, AI backlog of $73 billion, total backlog around $162 billion, EBITDA margin near 67%, operating margin about 39%, net margin roughly 31–32%, free-cash-flow margin around 41%, and a balance sheet with low capex intensity and manageable leverage together describe an AI infrastructure core asset, not a speculative flyer.
At $325–340 the stock is not cheap, but the reset from $412.97 has moved NASDAQ:AVGO from perfection pricing into a zone where double-digit growth, a visible AI order book, and strong software profitability can justify a forward multiple in the low-30s. On that basis, the stock is a buy with a bullish medium-term bias, with the caveat that volatility will remain high and any AI sentiment shock can produce another sharp leg down before the long-term compounding story plays out.

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