Updated 4/11/25
Broadcom Inc. (AVGO) has steadily grown into one of the most influential players in tech, combining leadership in semiconductors with a growing presence in infrastructure software. Under the direction of CEO Hock Tan, the company has executed a focused strategy of innovation, cash generation, and well-timed acquisitions. Its transition toward AI-focused hardware and recurring software revenue, including the recent addition of VMware, has positioned it to benefit from structural shifts in enterprise and cloud computing. With strong free cash flow over $20 billion, a long track record of dividend growth, and a stock that has consistently outperformed, Broadcom appeals to investors seeking both income and exposure to long-term tech trends. While risks remain—from integration challenges to a competitive AI landscape—Broadcom’s operational consistency and forward-looking strategy continue to reinforce its role as a leader in next-generation technology infrastructure.
Recent Events
Broadcom’s acquisition of VMware was a big one, further signaling its move toward recurring revenue models that offer more stability. For investors seeking income, that’s a meaningful shift—it adds cushion and clarity to earnings forecasts.
In its latest reported numbers, Broadcom posted revenue of $54.5 billion over the trailing twelve months, up 16.4% year over year. That’s not a modest gain, especially considering the size of the business. Net income came in at $10.4 billion, helped along by 172.7% growth in quarterly earnings. That kind of bottom-line strength gives the company room to keep raising dividends without blinking.
Cash flow tells the real story here. With over $21 billion in operating cash flow and more than $25 billion in levered free cash flow, Broadcom’s payout is backed by solid fundamentals. The company’s market cap has ballooned past $800 billion, and it’s beginning to feel like it could be the next to join the trillion-dollar club.
Key Dividend Metrics
📈 Forward Dividend Yield: 1.61%
💵 Annual Dividend Rate: $2.36
📅 Ex-Dividend Date: March 20, 2025
📊 Payout Ratio: 100.46%
📈 5-Year Average Yield: 2.50%
🔁 Dividend Growth Streak: 13 consecutive years
💰 Last Dividend Payment: March 31, 2025
🔍 Trailing Yield: 1.30%
Dividend Overview
At first glance, Broadcom’s yield might seem a little on the low side compared to traditional dividend stocks. But once you dig into the numbers, it becomes clear this is a quality-over-quantity kind of income play. The forward yield of 1.61% isn’t about chasing high payouts—it’s about reliability, growth, and long-term performance.
The current payout ratio is technically over 100%, which could raise a few eyebrows. But this figure is based on GAAP earnings, which often don’t tell the full story—especially in a company like Broadcom that makes significant acquisitions and has non-cash expenses. When you shift the focus to cash flow, the dividend is clearly well-covered.
That’s where Broadcom shines. With over $25 billion in free cash flow, the company could continue paying its dividend and still have billions left over. The payout is consistent and timely, with the most recent dividend paid at the end of March and the prior ex-dividend date set in mid-March. This kind of rhythm is a nice plus for investors who rely on dependable income.
Dividend Growth and Safety
This is where Broadcom really separates itself. For 13 straight years, the company has increased its dividend. And these haven’t been token raises—they’ve been meaningful. If you’ve held AVGO for any length of time, your income from it has likely grown much faster than inflation.
Looking at the past five years, the average yield has been higher than it is today, sitting around 2.5%. That doesn’t reflect shrinking dividends—it’s simply that the stock price has run up faster than the payout increases. And that’s a good thing. It means the company has been delivering both income and price appreciation.
The software side of the business is expected to improve the consistency of earnings even further, which could fuel future dividend hikes. That stability, combined with strong cash flow, makes Broadcom one of the more attractive dividend-growth stories in the tech space.
Yes, the debt load is worth keeping an eye on—$40 billion in total debt with a high debt-to-equity ratio. But there’s also $11 billion in cash on the balance sheet, and the cash-generating ability of this business is significant. The current ratio sits at 1.0, suggesting that short-term liabilities are well-managed.
On top of all this, Broadcom recently announced a 10-for-1 stock split, scheduled for July 15, 2024. While splits don’t change the fundamentals, they do tend to improve liquidity and bring in a broader base of investors. It’s also often a vote of confidence from management about where they see the stock heading.
Cash Flow Statement
Broadcom’s cash flow profile continues to be a source of strength. For the trailing twelve months (TTM), the company generated $21.26 billion in operating cash flow, marking a steady climb from $13.76 billion just four years ago. Free cash flow closely followed at $20.73 billion, showing that Broadcom keeps a tight rein on capital spending, which came in at only $526 million. This consistent free cash flow is what supports the company’s dividend growth and provides financial flexibility for strategic investments.
On the investing side, the cash inflow of $2.23 billion in the TTM period contrasts sharply with the prior year’s outflow of over $23 billion, reflecting the completion of major deals like VMware. Meanwhile, financing activity shows Broadcom returning large sums to shareholders and managing debt—$26 billion flowed out from financing, driven by debt repayments of $26.76 billion and share repurchases totaling $6.14 billion. Although the company issued nearly $17 billion in new debt, it’s clearly prioritizing deleveraging with a net reduction. The ending cash position remained stable at just over $9.3 billion, signaling that despite aggressive capital returns and strategic moves, liquidity isn’t being compromised.
Analyst Ratings
Broadcom has recently attracted a wave of positive attention from analysts, with several firms raising their price targets in light of the company’s strong performance and strategic initiatives. 📈 Robert W. Baird increased its price target from $195 to $210, maintaining an “outperform” rating, reflecting confidence in Broadcom’s robust fundamentals and growth prospects. 🔍 Similarly, Truist Financial and KeyCorp have raised their price objectives to $267 and $275, respectively, citing Broadcom’s leadership in AI infrastructure and its expanding software business. 🚀
The consensus among analysts is notably optimistic, with an average 12-month price target of approximately $231.48. This suggests a potential upside of about 27.76% from current levels. 📊 The highest price target stands at $300, while the lowest is $170, indicating a broad range of expectations based on varying assessments of market conditions and company performance. 🌐 Overall, the consensus rating for Broadcom is a “Moderate Buy,” reflecting general confidence in the company’s trajectory. 👍
These upward revisions are largely driven by Broadcom’s strategic positioning in the AI sector, particularly its advancements in application-specific integrated circuits (ASICs) that are crucial for AI applications. Analysts highlight the company’s potential to capitalize on the growing demand for AI infrastructure, which is expected to significantly boost earnings in the coming years. 🤖
Earning Report Summary
Broadcom’s latest earnings were the kind that grab attention, especially if you’re tracking growth in AI and enterprise tech. For the first quarter of fiscal 2025, revenue landed at $14.92 billion. That’s a solid 25% increase from the same period last year, and it wasn’t a fluke. The results reflected a strong mix of performance across its semiconductor and software segments.
AI Driving Semiconductor Growth
The semiconductor side of the business brought in $8.2 billion, up 11% year over year. What really stood out, though, was the jump in AI-related revenue. That part of the business more than doubled, climbing to $4.1 billion. Broadcom is clearly making strides in AI-focused chips, especially those that power large-scale data centers. With demand for AI infrastructure surging across industries, this segment looks like it’s just warming up.
Software Expansion with VMware
Then there’s the infrastructure software division, which pulled in $6.7 billion. That’s a 47% bump from the prior year. A big part of that comes from folding VMware into the mix, which is helping Broadcom shift toward a more stable, subscription-style revenue stream. That’s the kind of predictability that investors tend to like.
Profitability and Outlook
Profitability was just as impressive. Adjusted EBITDA hit $10.1 billion, up 41%. That kind of jump tells you the business isn’t just growing—it’s doing it efficiently. Looking ahead, Broadcom expects revenue in the next quarter to come in around $14.9 billion. AI-related semiconductor revenue alone is projected to grow to $4.4 billion, which would mark a 44% increase from a year earlier.
All in all, the quarter reinforced the story Broadcom has been telling for a while now: this is a company building serious momentum in areas that matter—AI, infrastructure, and high-margin software.
Chart Analysis
AVGO’s one-year price chart tells a story of momentum, reversal, and what looks like a developing base after a healthy correction. This view blends price movement, moving averages, volume, and RSI to paint a well-rounded picture of the stock’s behavior over the past year.
Moving Averages
The red 50-day moving average climbed steadily until late February, when it peaked and began trending lower. This shift followed an extended rally where the price stayed well above both the 50-day and the 200-day moving averages. That upward trend began to falter around March, with the stock slipping below the 50-day line. What’s more telling is the recent drop below the 200-day moving average, which historically acts as a longer-term gauge of support. But now, the price has rebounded and is testing that level again. If it holds and moves higher, it could suggest the early stages of a longer-term recovery.
Price Behavior
From April through early December, AVGO steadily climbed, with a few bursts of momentum in late spring and winter. A sharp breakout happened around December, pushing the price to highs near 255 before a gradual but persistent downtrend took hold. The pullback in March looked like a capitulation move, followed by a sudden bounce—suggesting buyers stepped in at what they perceived as value territory. Now, the stock appears to be consolidating in the 180–190 zone, trying to reclaim lost ground.
Volume
Volume spikes in December and early March aligned with major price moves—first to the upside and then in the steep correction. The uptick in volume during recent price gains shows renewed interest, possibly signaling institutional buying after the pullback. However, volume has been relatively modest during sideways periods, which suggests a wait-and-see mode for many traders and investors.
RSI
The Relative Strength Index (RSI) dropped below 30 during the March dip, entering oversold territory. Since then, it’s climbed back into neutral ground, now sitting just below 50. That shift reflects a rebound in momentum, but not yet a strong bullish trend. The RSI isn’t flashing extremes right now, but the low from March indicates the recent sell-off may have flushed out short-term excess.
Taken together, AVGO looks like it’s found a potential floor after a meaningful correction. It’s early, but the rebound off the March low combined with the test of the 200-day moving average could be an encouraging sign for those looking past the short-term noise.
Management Team
Broadcom’s leadership is centered around CEO Hock Tan, who has led the company since 2006. During his tenure, Broadcom has undergone a remarkable transformation—shifting from a conventional semiconductor company into a diversified technology player with strong positions in software and infrastructure. Tan is known for being disciplined with capital, focused on shareholder value, and aggressive when it comes to strategic acquisitions. His style is pragmatic, methodical, and often praised for its results-driven approach.
Backing him is a veteran leadership team that includes CFO Kirsten Spears, who’s played a key role in maintaining Broadcom’s solid financial footing. The broader executive team brings together a blend of technical and operational expertise, which has been instrumental in executing large, complex transactions like the VMware deal. This team isn’t just reacting to industry trends—they’re anticipating them and building a business designed to thrive in both cyclical and structural shifts.
Valuation and Stock Performance
Broadcom’s stock performance over the past year has been anything but quiet. Shares have pushed higher on the back of strong earnings, healthy margins, and increasing exposure to AI infrastructure and enterprise software. Its market cap has grown substantially, landing Broadcom among the upper echelon of global tech firms. Investors have been willing to reward the company with a premium valuation, given its consistent results and ambitious—but well-executed—expansion strategy.
That said, the valuation does come with expectations. Broadcom trades at a multiple above many of its peers, and that reflects a bet on continued growth, especially in AI and subscription-based software. The current forward price-to-earnings ratio suggests investors are confident that revenue and free cash flow will keep expanding. With free cash flow north of $20 billion and strong margins, there’s an argument to be made that the valuation is justified. But it also means there’s less room for error. The market has already priced in a lot of future success, so any missteps—be it integration hiccups or delays in AI adoption—could result in volatility.
Risks and Considerations
As strong as the business looks on paper, there are still a few headwinds worth watching. The tech landscape moves fast, and competition in semiconductors remains fierce. Companies like Nvidia, AMD, and others are also racing to serve the growing AI market, and innovation cycles in this space are measured in months, not years.
There’s also the added complexity that comes with Broadcom’s shift toward enterprise software. Integrating businesses like VMware requires not only operational finesse but cultural alignment. Software operates on very different rhythms than hardware, and ensuring long-term synergy could prove more difficult than anticipated. The financial burden of large acquisitions, while manageable today, could become a concern if free cash flow tightens or growth slows.
Then there’s the macro picture. Supply chain issues haven’t gone away entirely, and geopolitical tensions—especially in regions important to semiconductor production—could create unforeseen obstacles. Regulatory scrutiny is also on the rise globally, and Broadcom’s size and reach make it a target for regulators paying close attention to market consolidation.
Final Thoughts
Broadcom has built a reputation for discipline, innovation, and execution. Its transition into software, alongside continued strength in semiconductors, gives it a dual engine for growth that few peers can match. The leadership team knows how to deploy capital wisely, and the company’s track record suggests that when it places a bet, it tends to pay off.
The stock’s performance and valuation reflect that confidence. Still, success isn’t guaranteed. The risks—while not immediate red flags—are very real and should be factored in by anyone following the name. But if the company continues to execute on its vision, keeps expanding in AI infrastructure, and successfully integrates its growing portfolio of software assets, the long-term outlook remains compelling.
Broadcom isn’t just reacting to the future of tech—it’s trying to shape it. And so far, it’s doing a convincing job.