AVGO Stock is Down 26% - Here's Everything You Need to Know

Daniel Pronk•Sep 4, 2026

Summary

Daniel provides a deep dive into Broadcom's recent quarterly performance and future outlook, noting that the company is currently trading 25% below its all-time high. Daniel highlights the company's impressive 86% revenue growth and massive free cash flow margins of 46%, suggesting that the fundamental business is performing exceptionally well. The core of Daniel's thesis is that Broadcom is the indispensable leader in custom AI chip design (XPUs) and networking, serving major hyperscalers and frontier AI labs.

AVGO: Daniel notes that the stock is trading around $360, which represents a forward P/E of roughly 21, a level that has historically served as a strong entry point for long-term investors. Daniel explains that if Broadcom achieves its 2028 goal of over $30 in earnings per share, the stock could potentially reach a price prediction of $600 based on a conservative 20x multiple. Daniel acknowledges the significant risk of high customer concentration, specifically with OpenAI and Anthropic, but Daniel believes that any demand gap would likely be filled by other tech giants like Meta or Google due to the current supply-constrained environment.

Mentioned Stocks

AVGO

Sentiment: BUYAction: RECOMMENDED

Reasoning: Daniel views Broadcom as a high-quality market leader in custom AI chip design with a significant competitive moat due to its execution speed and integrated solutions. Daniel mentions that while the market is skeptical of the heavy revenue concentration from OpenAI and Anthropic, Broadcom’s historical conservative guidance and current forward P/E of 21 make the stock look attractive. Daniel highlights that everything around $360 represents a valuation level that has historically yielded high returns, and Daniel points out a price prediction of $600 by 2028 if the company hits its $30 EPS target.

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