AVGO
Broadcom Inc.NasdaqThree independently researched cases — bear, base, and bull — generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Market vs intrinsic value as of valuation
Compared against the researched share price for AVGO; recalculate the valuation to refresh it.
Base inputs from financials
source period →Base revenue (TTM)
$75.5B
Diluted shares
4,876,000,000
Net cash
-$45.3B
Bear
low confidence$70.75
IV / share
-80.9% vs $370.16
Revenue growth22.0% → 25.0% → 12.0% → 8.0% → 5.0%medium
Applied to the $75.5B TTM base, this lands FY26 near ~$92B and FY27 near ~$115B — well short of the >$100B AI-only 2027 target — reflecting hyperscaler ASIC order push-outs, customer in-sourcing, and the VMware software deceleration that already caused a guidance miss.
Operating margin44.0%medium
Custom XPU/ASIC revenue carries structurally lower gross margin than legacy networking and software, so a mix shift toward hardware plus pricing concessions to a concentrated customer base pulls GAAP operating margin back toward the FY26 Q1 level rather than sustaining the Q2 peak.
Tax rate19.0%medium
A bear path assumes erosion of Broadcom's low-tax IP structures and Pillar Two global-minimum-tax drag pushing the effective rate close to statutory.
Reinvestment rate30.0%low
Weak growth still requires heavy advanced-packaging prepayments, capacity reservations, and R&D to defend sockets, so each dollar of NOPAT buys less growth — the worst-case capital efficiency.
Terminal growth2.5%high
Post-AI-buildout, a maturing semiconductor franchise grows only in line with, or slightly below, nominal GDP.
Base
medium confidence$161.32
IV / share
-56.4% vs $370.16
Revenue growth30.0% → 45.0% → 25.0% → 15.0% → 10.0%medium
Off the $75.5B TTM base this produces ~$98B in FY26 and ~$142B in FY27 — consistent with management's >$100B FY27 AI target plus ~$20B non-AI semis and ~$22B software — then decelerates as the 10-gigawatt 2027 shipment wave annualizes.
Operating margin51.0%medium
Continued operating leverage on a fixed R&D base and the decline of VMware purchase-accounting amortization lift GAAP operating margin modestly above the current 48.6% quarterly run-rate.
Tax rate16.0%medium
Broadcom's effective rate has run well below statutory, and the base case assumes it converges only partway toward 21% as global minimum-tax rules phase in.
Reinvestment rate22.0%medium
As a fabless designer, Broadcom converts revenue growth into cash with far less capital than an IDM, so roughly a fifth of NOPAT funds working capital, capex, and tuck-in R&D.
Terminal growth3.2%high
A steady-state growth rate at nominal GDP is the standard cap for a mature, globally diversified franchise and stays safely below the risk-free rate.
Bull
low confidence$296.66
IV / share
-19.9% vs $370.16
Revenue growth35.0% → 60.0% → 35.0% → 22.0% → 15.0%low
If the six-customer XPU pipeline converts at BofA's per-gigawatt economics, FY27 total revenue clears $160B and FY28 approaches $220B — the upper end of the analyst math that treats the $100B target as conservative.
Operating margin57.0%low
Extreme volume leverage on fixed R&D, full VMware amortization roll-off, and a richer Tomahawk/optics attach mix drive GAAP margin toward the company's non-GAAP structural ceiling.
Tax rate14.0%medium
Sustained favorable IP domicile plus enlarged domestic R&D credits keep the cash tax rate meaningfully below the 21% statutory rate.
Reinvestment rate17.0%low
Customer-funded non-recurring engineering and TSMC-borne fab capex mean Broadcom captures hyperscale growth while retaining most of NOPAT as free cash flow.
Terminal growth4.0%medium
A durable compute-infrastructure toll position lets Broadcom grow slightly faster than nominal GDP in perpetuity, still capped below the risk-free rate.
Market inputs researched
The 10-year constant-maturity Treasury is the standard duration-matched risk-free proxy for a USD DCF.
Broadcom's cyclical semiconductor exposure and AI-driven volatility justify a levered beta well above 1.0.
The forward-looking implied premium is preferred to historical averages because it reflects current index pricing and cash-flow expectations.
Most recent market close, used to compare intrinsic value per share against price.
Generated 7/20/2026, 3:17:33 AM · pipeline v1.0.0