Track market-moving stories before they get noisy

It's been a lopsided year for tech investors. The VanEck Semiconductor ETF is up about 52% in 2026 as of this writing. But chip designer Broadcom (AVGO -0.48%) is down about 3% this year. At roughly $334, its stock trades about 31% under June 2's close of $481.57, the highest ever.

Adobe (ADBE -2.49%) has dropped even more. Shares of the creative software maker have risen about 33% from their June 25 low close of $193.41.

But at about $257, the stock is still about 63% under the record close of $688.37 it hit in November 2021.

I don't think either business is in trouble, though. Both companies' latest quarterly reports showed healthy growth, and both stocks now cost less than the overall market relative to the earnings they're expected to post.

Here's a closer look at each.

Image source: The Motley Fool.

1. Broadcom: faster growth, a lower stock priceMost of Broadcom's drop came quickly. The stock shed around a fifth of its value over the two trading days after its June 3 earnings report, and it hasn't closed within 10% of that record since.

The business, though, kept speeding up. Showing this momentum, Broadcom's revenue climbed 86% year over year to $29.6 billion in its fiscal third quarter of 2026 (the period ending Aug. 2). That was up from growth of 48% in the fiscal second quarter and 29% in the fiscal first quarter. And management forecast fiscal fourth-quarter revenue of around $34.8 billion, which would be about 93% above the year-ago quarter's $18.0 billion. Profits kept up, too. In fiscal Q3, Broadcom's non-GAAP (adjusted) earnings per share almost doubled year over year, and free cash flow jumped 95% to $13.7 billion.

Put another way, the business grew faster every quarter in a year when its shares have been about flat.

AVGO Broadcom$321.68-$1.56 (-0.48%)

NASDAQ · As of 4:00 PM ET 10/23/26

The key risk is how much of this growth comes from a few buyers. Broadcom estimates its top five end customers accounted for around 55% of its revenue in fiscal Q3, up from about 40% a year before. If one of them cuts back, results might swing sharply.

But going by analysts' consensus for fiscal 2027, the stock sells for around 17 times earnings. At that price, investors arguably already allow for a lot of this concentration risk.

2. Adobe keeps raising its targetsAdobe's drop began long before this year, and 2026 hasn't helped. Even after its bounce from the June low, the stock is down around 27% for the year. A lot of the pessimism seems to come from worries that artificial intelligence (AI) might undercut software companies like Adobe.

The company's results tell a steadier story. In the fiscal third quarter of 2026 (the period ended Aug. 28, 2026), Adobe's revenue grew 13% year over year to $6.76 billion, the highest of any quarter on record. Its adjusted earnings per share climbed 15% to $6.13. And Adobe said it topped 1 billion monthly active users across its creativity and productivity products.

Not only did growth hold up, but management also raised its full-year targets for the second straight quarter. Adobe now expects fiscal 2026 adjusted earnings per share between $24.45 and $24.50, up from the $23.30 to $23.50 range it gave in December.

ADBE Adobe$263.82-$6.73 (-2.49%)

NASDAQ · As of 4:00 PM ET 10/23/26

Sure, growth might be slowing a little. Management's fourth-quarter target of $6.80 billion to $6.85 billion in revenue would put growth at 10% to 11% compared to the $6.19 billion Adobe took in during the year-ago quarter.

But the stock is priced for much worse than that. At around $257, shares cost about 10.5 times the adjusted earnings Adobe expects to make this fiscal year (taking the midpoint of its target).

Both cost less than the marketBy comparison, the S&P 500 (^GSPC -0.52%) trades at around 19 times earnings, using analysts' estimates for the next 12 months. So investors buying either stock today pay less for every dollar of expected profit than they would for the index -- even though both companies grew adjusted earnings per share by double digits last quarter.

The two face different risks, of course. Broadcom relies on a few very big customers, and Adobe's growth is probably slowing from the pace of its best years. But I think both sell-offs have gone further than the businesses justify.

I'd consider buying both stocks today, building each position gradually.

Nvidia (NVDA -0.59%) and Broadcom (AVGO -0.48%) are two of the leading semiconductor companies at the center of the ongoing artificial intelligence (AI) revolution. Both tech leaders have been handsomely rewarded for their troubles. Over the past five years, Nvidia's shares have climbed by about 904%, as of writing, while Broadcom has gained 563%.

Both could continue capitalizing on the AI industry's growth, but which one will perform better over the next five years? My money is on Nvidia, and here is why.

Image source: The Motley Fool.

Is Nvidia's momentum about to stop?Nvidia is best known for making GPUs (graphics processing units), the workhorse of AI training. Demand for the company's products has been the main driver behind outstanding revenue and earnings growth in recent years.

However, many worry that this tailwind may be coming to an end. There is increased demand for Application-Specific Integrated Circuits, custom AI chips designed to handle specific workloads. Broadcom is a leader in designing ASICs.

As companies increasingly seek to reduce their reliance on Nvidia's hardware for various reasons, including price-related ones, Broadcom may benefit. Even so, several things signal that demand for Nvidia's GPUs will remain high for the foreseeable future. For instance, even as some of the hyperscalers double down on AI chips, they remain loyal Nvidia customers.

NVDA Nvidia$210.96-$1.25 (-0.59%)

NASDAQ · As of 4:00 PM ET 10/23/26

Some of them have said so. Amazon's (AMZN -0.95%) CEO, Andy Jassy, predicted that the company would be an Nvidia partner for as long as he can foresee. Other companies, including Tesla (TSLA -0.63%) and Space Exploration Technologies (SPCX +1.89%), are spending fortunes on their AI-related ambitions. So, it appears that the predicted continued increase in AI infrastructure spending will benefit Nvidia over the medium term.

It should benefit Broadcom as well, but there are several reasons Nvidia is arguably in a better position. Let's consider three of them. First, Nvidia is the undisputed leader in the GPU market, holding a more than 90% market share.

The company's technological expertise is only part of the reason it has remained the top player in this industry. Its real competitive edge stems from its CUDA ecosystem, which creates high switching costs.

Broadcom is also a leader in the ASIC space, but its roughly 60% market share isn't nearly as impressive as Nvidia's dominance in GPUs. Besides, I'd argue that Broadcom's moat is narrower, while the company is increasingly facing tough competition. Second, even as Broadcom's AI semiconductor revenue continues to grow rapidly, this business has lower gross margins than the company's Infrastructure software segment.

AVGO Broadcom$321.68-$1.56 (-0.48%)

NASDAQ · As of 4:00 PM ET 10/23/26

So, as AI semiconductor revenue accounts for an increasingly large percentage of revenue, gross margins could drop. That won't mean lower profits. It will mean a lower gross profit per dollar of revenue.

Third, Nvidia is no longer just a GPU company. The company has expanded well beyond that and now offers a full-stack AI platform. The company's GPU business should remain the main growth driver, but other products, such as CPUs (central processing units), should contribute meaningfully over the medium term.

It is true that Broadcom is significantly diversified beyond its semiconductor solutions, notably thanks to its software segment. But Nvidia has also made an effort to diversify its business, and that could pay rich dividends down the road.

Do valuation considerations tip the scales in Broadcom's favor?Which one of these two companies appears more attractively valued right now? Some might say it is Broadcom. It is trading at 19.4x forward earnings, versus Nvidia's 24.9x, and an average of 19.3x for information technology stocks. I'd buy Broadcom's shares at current levels, but Nvidia looks more attractive given its position in the AI industry and therefore deserves a higher premium. So, even with a higher forward price-to-earnings ratio, Nvidia could outperform Broadcom over the next five years.

AMD could experience even stronger demand for its products amid the advent of agentic AI. Broadcom's custom chips are solving a real problem for the hyperscalers.

AMI Asset Management Corp trimmed its stake in Broadcom Inc. (NASDAQ: AVGO) by 4.2% in the third quarter, according to the company in its most recent disclosure with the SEC. The firm owned 233,379 shares of the semiconductor manufacturer's stock after selling 10,187 shares during the quarter. Broadcom comprises 4.7% of AMI Asset

Broadcom Inc. (AVGO) concluded the recent trading session at $323.24, signifying a -4.31% move from its prior day's close.

Broadcom's AI revenue is exploding and Wall Street analysts are nearly unanimous in their bullish stance, yet the stock sits in the red for the year while the S&P 500 surges. Something has to give, and the path to $700…

Broadcom (NASDAQ:AVGO | AVGO Price Prediction | AVGO Price Prediction) has become the custom silicon engine of the AI buildout. Fiscal Q3 revenue reached $29.59B, up 85.5% YoY, and AI semiconductor revenue hit $16.70B.

Even so, the stock is down 2.41% year to date while the S&P 500 is up 12.87%. I can’t make that gap add up. So can Broadcom reach $700 per share by 2030?

What’s Holding Broadcom Back Right Now Shares fell 5.3% over the past week and 5.9% over the past month. Margin mix is part of the problem. Q3 gross margin came in at 75% of revenue, down 210 basis points sequentially, and Q4 is guided to about 73% as memory-heavy XPUs dilute the mix. Concentration is the other worry.

Hock Tan said “the vast majority of compute demand for AI workloads today originates from these concentrated group who develops state-of-the-art frontier models.” With a beta of 1.476, the stock moves harder than the market in both directions.

Wall Street Sees 57% Upside. Our Model Says 22% The consensus target is $527.59, meaning 57.4% upside. Analysts count 7 strong buys, 40 buys, 3 holds and 0 sells. Our one-year base case is $410.50, or 22.47% upside, within a range of $365.37 to $534.68. Model confidence stands at a high 0.9.

I think our model is too conservative. A mega-cap dampener of 0.5 halves the boost from 94% bullish analysts and an earnings growth contribution of 0.03.

Here’s What It Takes for Broadcom to Reach $700 Reaching $700 from today’s price of $335.18 would require a gain of 108.8%. With forward EPS of $18.376, a price of $700 meaning a forward P/E of 38x. Our base case already meaning 34x, so the bold target needs about 4x of additional multiple expansion.

Earnings growth does most of that work. Our estimate gets a 1.144 lift, reflecting a 1.15 premium for technology stocks and strong analyst support. Tan said Broadcom is “very much on target to exceed $30 in earnings per share in fiscal 2028.” At $30, a $700 stock trades at just 23x.

Management expects AI semiconductor revenue to about double to $115 billion in fiscal 2027 and to $230 billion in fiscal 2028, backed by Alphabet (NASDAQ:GOOGL) Google TPU deals worth multi-tens of billions of dollars annually and OpenAI deployments of over 5 gigawatts in 2028.

In Tan’s words, “Q3 demand was simply hot and we’re just getting started.” Our own 2030 bull path reaches $870.61.

The main risk is supply: shortages of wafers, HBM, power, or data center shells could push deployments out. The traits that show up early in the biggest AI chip winners are the same ones we cataloged in a free playbook.

Where Broadcom Trades Today vs Its Earnings Power The stock trades at a forward P/E of 18x, which looks cheap next to Q3 non-GAAP EPS growth of 96% year-on-year. Shares sit between a 52-week low of $288.95 and a high of $493.28.

Over 10 years, Broadcom has returned 2396.48% against 259.69% for the S&P 500. At this multiple, earnings delivery alone could carry the stock most of the way to $700.

Is $700 Realistic? Here’s My Take Reaching $700 by 2030 requires a 108.8% gain. I call it a stretch, but an achievable one.

Three things need to go right: AI revenue has to reach the fiscal 2027 outlook, EPS has to clear $30 in fiscal 2028, and operating margin has to hold near 66%.

A sharp pullback in hyperscaler spending would undermine the thesis. Returns at this level shouldn’t be expected every year, but we’ve outlined the path for how Broadcom could reach $700 in 2030.

Contact [email protected] for any questions or corrections.

Key Takeaways Snowflake leads Broadcom with 47.1% YTD gains and strong AI-driven growth.
SNOW raised its fiscal 2027 product revenue outlook to $6.07 billion.
Broadcom's AI growth faces margin pressure, customer concentration and debt risks.

Snowflake (SNOW - Free Report) and Broadcom (AVGO - Free Report) are major players in the enterprise AI boom. Snowflake provides AI-powered cloud data platforms and analytics, while Broadcom supplies the AI networking, custom silicon and infrastructure technologies that enable large-scale AI deployments across enterprises and hyperscale data centers.

Snowflake or Broadcom — Which of these Enterprise AI stocks has the greater upside potential? Let’s find out.

The Case for SNOW StockSnowflake is benefiting from a strong enterprise AI push as organizations increasingly use its AI Data Cloud to modernize data estates, deploy agents and automate business workflows. This momentum helped product revenues rise 37% year over year to $1.49 billion in the second quarter of fiscal 2027, accounting for 96% of total revenues and marking another quarter of accelerating growth.

Enterprise expansion remains another key catalyst. In the second quarter of fiscal 2027, SNOW had 14,554 total customers after adding 692 net new customers, representing a 32% year-over-year increase in net additions. The company added 14 Forbes Global 2000 customers, taking that total to 829. Large-customer momentum remained strong, with 828 customers generating more than $1 million in trailing 12-month product revenues, up 27% year over year. Another 65 customers exceeded $10 million in trailing product revenues.

The adoption of Snowflake’s AI offerings remains noteworthy. In the second quarter of fiscal 2027, CoCo surpassed 9,100 accounts after adding more than 2,000 during the quarter, while CoWork expanded to 5,800 accounts, up nearly 11% sequentially. Customers, including 1Password and Indeed, are deploying these solutions to accelerate data and AI initiatives.

Strong AI demand is improving Snowflake’s financial outlook. For fiscal 2027, the company raised product revenue guidance to $6.07 billion, implying 36% year-over-year growth compared with its previous outlook of $5.84 billion and 31% growth. Fiscal third-quarter product revenues are expected to be between $1.588 billion and $1.593 billion, indicating 37-38% growth.

The Case for AVGO StockBroadcom is benefiting from growing enterprise AI demand, which is creating opportunities across its semiconductor and infrastructure software businesses. Broadcom’s expanding portfolio of custom AI accelerators, networking solutions and VMware offerings strengthens its competitive position and supports its long-term growth prospects.

Broadcom’s AI semiconductor revenues surged 221% year over year to $16.7 billion in the third quarter of fiscal 2026, driven by strong demand for custom XPUs and AI networking solutions. The company’s six XPU customers are accelerating deployments, while partnerships with Google, Anthropic, OpenAI and Meta Platforms provide significant growth opportunities. AI networking revenues more than doubled, supported by increasing demand for high-performance connectivity.

This momentum provides strong visibility into Broadcom’s AI growth trajectory. The company expects fourth-quarter fiscal 2026 AI revenues of $21.7 billion, up 236% year over year, taking fiscal 2026 AI revenues to roughly $58 billion. Broadcom has secured supply to support AI semiconductor revenues of approximately $115 billion in fiscal 2027 and sees a path to roughly $230 billion in fiscal 2028, reflecting continued expansion in AI compute deployments.

Price Performance and Valuation of SNOW and AVGOIn the year-to-date period, SNOW shares have gained 47.1%, outperforming Broadcom shares, which have lost 2.4%. The outperformance of SNOW can be attributed to strong AI adoption and increasing usage of its platform, as reflected by the net revenue retention rate of 126% in the second quarter of fiscal 2027. 

Despite Broadcom’s expanding portfolio, high customer concentration, intense competition, declining gross margin as the XPU mix increases, and execution risk tied to large AI infrastructure commitments remain headwinds. The company also remains exposed to a sizable debt burden and integration complexity.

SNOW vs AVGO Performance
Image Source: Zacks Investment Research

Both SNOW and Broadcom shares are currently overvalued, as suggested by a Value Score of F.

In terms of forward 12-month Price/Sales, SNOW shares are trading at 15.06X, higher than Broadcom’s 9.33X.

SNOW vs AVGO Valuation
Image Source: Zacks Investment Research

How Do Earnings Estimates Compare for SNOW & AVGO?The Zacks Consensus Estimate for SNOW’s fiscal 2027 earnings is pegged at $2.23 per share, increased by 1.82% over the past 30 days. This indicates a 78.40% increase year over year.

The Zacks Consensus Estimate for Broadcom’s fiscal 2026 earnings is pegged at $11.79 per share, unchanged over the past 30 days. This indicates a 72.87% increase year over year.

SNOW’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 22.77%. Broadcom’s earnings beat the consensus mark in each of the trailing four quarters, delivering an average surprise of 2.51%. The average surprise of SNOW is higher than that of Broadcom.

ConclusionWhile both Snowflake and Broadcom are well-positioned to benefit from the enterprise AI boom, SNOW appears to be the better pick, supported by stronger share price performance, accelerating product revenue growth and higher earnings surprises.

Despite strong AI semiconductor revenue growth and expanding hyperscaler partnerships, Broadcom faces challenges from customer concentration, margin pressure, a sizable debt burden and execution risks tied to large AI infrastructure commitments.

Currently, Snowflake has a Zacks Rank #2 (Buy), making the stock a stronger pick than Broadcom, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Columbia Asset Management cut its holdings in Broadcom Inc. (NASDAQ:AVGO – Free Report) by 4.3% during the 3rd quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund owned 43,499 shares of the semiconductor manufacturer’s stock after selling 1,943 shares during the quarter. Broadcom makes up approximately 2.5% of Columbia Asset Management’s holdings, making the stock its 10th largest holding. Columbia Asset Management’s holdings in Broadcom were worth $15,276,000 at the end of the most recent quarter.

Other hedge funds also recently bought and sold shares of the company. Maia Wealth LLC raised its position in Broadcom by 20.5% during the 3rd quarter. Maia Wealth LLC now owns 18,205 shares of the semiconductor manufacturer’s stock valued at $6,393,000 after purchasing an additional 3,101 shares during the last quarter. Tanager Wealth Management LLP lifted its holdings in Broadcom by 44.1% in the 3rd quarter. Tanager Wealth Management LLP now owns 6,434 shares of the semiconductor manufacturer’s stock worth $2,260,000 after buying an additional 1,969 shares during the period. Novem Group grew its position in shares of Broadcom by 5.1% in the 3rd quarter. Novem Group now owns 25,210 shares of the semiconductor manufacturer’s stock worth $8,854,000 after buying an additional 1,232 shares during the last quarter. Sterling Investment Counsel LLC grew its position in shares of Broadcom by 29.0% in the 3rd quarter. Sterling Investment Counsel LLC now owns 8,792 shares of the semiconductor manufacturer’s stock worth $3,088,000 after buying an additional 1,977 shares during the last quarter. Finally, Value Partners Investments Inc. grew its position in shares of Broadcom by 7.6% in the 3rd quarter. Value Partners Investments Inc. now owns 7,545 shares of the semiconductor manufacturer’s stock worth $2,658,000 after buying an additional 534 shares during the last quarter. Hedge funds and other institutional investors own 76.43% of the company’s stock.

Analyst Upgrades and Downgrades Several equities analysts have recently issued reports on AVGO shares. Jefferies Financial Group started coverage on Broadcom in a research note on Thursday, September 3rd. They set a “buy” rating and a $550.00 target price on the stock. DA Davidson set a $350.00 price target on shares of Broadcom and gave the company a “neutral” rating in a report on Friday, September 4th. TD Cowen reiterated a “buy” rating and issued a $475.00 price target (down from $500.00) on shares of Broadcom in a report on Thursday, September 3rd. Raymond James Financial reissued an “outperform” rating and set a $475.00 price objective (up from $450.00) on shares of Broadcom in a research report on Thursday, September 3rd. Finally, Piper Sandler initiated coverage on shares of Broadcom in a report on Wednesday, September 9th. They issued an “overweight” rating and a $460.00 price objective for the company. One analyst has rated the stock with a Strong Buy rating, thirty-seven have given a Buy rating and three have issued a Hold rating to the company. According to data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and a consensus target price of $527.20.

Get Our Latest Report on AVGO Broadcom News Roundup Here are the key news stories impacting Broadcom this week:

Positive Sentiment: Broadcom launched Arcot Scam Defense, a feature designed to help financial institutions block AI-enhanced social-engineering fraud in card-not-present transactions. The product could strengthen Broadcom’s infrastructure-software portfolio and create additional enterprise demand. Broadcom Launches Arcot Scam Defense to Block Social Engineering Fraud Positive Sentiment: Broadcom’s 10-year agreement with NTT DOCOMO to advance the telecommunications company’s private cloud using VMware Cloud Foundation reinforces the durability of its recurring software revenue and enterprise-cloud strategy. Broadcom to Advance NTT DOCOMO’s Private Cloud with VMware Cloud Foundation Positive Sentiment: Several analyses continue to highlight Broadcom as a leading beneficiary of custom AI-chip and networking demand. One report cited a 236% increase in AI-chip sales, while investors view its combination of custom silicon, AI networking and infrastructure software as a potential alternative to Nvidia. Broadcom Sees AI Chip Sales Up 236% Neutral Sentiment: Commentary comparing Broadcom with Apple and other semiconductor stocks presents AVGO as a long-term AI and infrastructure-software opportunity, but emphasizes that the investment case depends on sustained customer spending and execution. Apple vs. Broadcom: Which Tech Stock Is a Better Buy in 2026? Negative Sentiment: Semiconductor shares have pulled back amid interest-rate concerns, worries that AI infrastructure spending may be excessive, and broader warnings of a possible AI-stock bubble. Broadcom CEO Hock Tan’s comments comparing AI spending with a “casino” and warning about capital constraints have also unsettled some investors. Chip Stocks Have Pulled Back Broadcom Trading Up 1.0% AVGO opened at $337.80 on Thursday. The stock has a market cap of $1.61 trillion, a PE ratio of 43.14 and a beta of 1.46. The company has a quick ratio of 2.29, a current ratio of 2.50 and a debt-to-equity ratio of 0.57. The business has a 50 day moving average of $359.37 and a 200-day moving average of $384.63. Broadcom Inc. has a 52 week low of $289.96 and a 52 week high of $495.00.

Broadcom (NASDAQ:AVGO – Get Free Report) last released its quarterly earnings results on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 earnings per share for the quarter, beating the consensus estimate of $3.22 by $0.10. The company had revenue of $29.59 billion for the quarter, compared to analyst estimates of $29.24 billion. Broadcom had a return on equity of 48.33% and a net margin of 42.94%. The firm’s revenue was up 85.5% on a year-over-year basis. During the same period in the previous year, the company posted $1.69 earnings per share. Equities research analysts predict that Broadcom Inc. will post 10.37 earnings per share for the current fiscal year.

Broadcom Dividend Announcement The company also recently disclosed a quarterly dividend, which was paid on Wednesday, September 30th. Shareholders of record on Monday, September 21st were given a dividend of $0.65 per share. The ex-dividend date of this dividend was Monday, September 21st. This represents a $2.60 annualized dividend and a yield of 0.8%. Broadcom’s dividend payout ratio (DPR) is currently 33.21%.

Broadcom Company Profile (Free Report)

Broadcom Inc (NASDAQ: AVGO) is a global technology company that designs, develops and supplies semiconductor and infrastructure software products. Its semiconductor solutions support data center, networking, broadband, wireless communications, storage, industrial and other electronic applications.

The company’s semiconductor portfolio includes networking and switching components, custom accelerators, connectivity and wireless devices, broadband equipment, optical products, storage controllers and related infrastructure technologies.

Read More Five stocks we like better than Broadcom GM Beat and Added a $20 Billion Buyback—Why Did the Stock Fall? Intercepting Growth: Karman Secures $218M Lockheed Martin Deal Tech Stocks Took a Hit—These 2 Pharma Stocks Are Near New Highs Chip Stocks Have Pulled Back—Here’s How 3 Semiconductor ETFs Stack Up for Investors Want to see what other hedge funds are holding AVGO? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Broadcom Inc. (NASDAQ:AVGO – Free Report).

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Cordatus Wealth Management LLC reduced its position in shares of Broadcom Inc. (NASDAQ:AVGO – Free Report) by 3.2% in the 3rd quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 57,314 shares of the semiconductor manufacturer’s stock after selling 1,888 shares during the period. Broadcom makes up approximately 4.5% of Cordatus Wealth Management LLC’s investment portfolio, making the stock its 4th biggest position. Cordatus Wealth Management LLC’s holdings in Broadcom were worth $20,128,000 at the end of the most recent quarter.

Several other institutional investors and hedge funds have also recently added to or reduced their stakes in the business. State Street Corp increased its stake in shares of Broadcom by 8.7% in the 2nd quarter. State Street Corp now owns 208,031,610 shares of the semiconductor manufacturer’s stock valued at $75,367,711,000 after purchasing an additional 16,651,378 shares during the last quarter. Bank of America Corp DE raised its holdings in shares of Broadcom by 4.6% during the 2nd quarter. Bank of America Corp DE now owns 61,423,013 shares of the semiconductor manufacturer’s stock worth $23,202,543,000 after buying an additional 2,685,916 shares in the last quarter. Wellington Management Group LLP lifted its position in shares of Broadcom by 3.8% during the 2nd quarter. Wellington Management Group LLP now owns 51,580,703 shares of the semiconductor manufacturer’s stock worth $19,484,611,000 after buying an additional 1,892,721 shares during the last quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC lifted its position in shares of Broadcom by 2.9% during the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 40,180,530 shares of the semiconductor manufacturer’s stock worth $15,178,195,000 after buying an additional 1,140,598 shares during the last quarter. Finally, Legal & General Group Plc acquired a new stake in Broadcom in the second quarter valued at about $11,998,148,000. 76.43% of the stock is currently owned by institutional investors.

Broadcom Price Performance Broadcom stock opened at $337.80 on Thursday. The stock has a 50-day moving average price of $359.37 and a two-hundred day moving average price of $384.63. Broadcom Inc. has a 12 month low of $289.96 and a 12 month high of $495.00. The company has a market capitalization of $1.61 trillion, a PE ratio of 43.14 and a beta of 1.46. The company has a current ratio of 2.50, a quick ratio of 2.29 and a debt-to-equity ratio of 0.57.

Broadcom (NASDAQ:AVGO – Get Free Report) last released its quarterly earnings results on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 earnings per share for the quarter, topping the consensus estimate of $3.22 by $0.10. The company had revenue of $29.59 billion for the quarter, compared to analysts’ expectations of $29.24 billion. Broadcom had a return on equity of 48.33% and a net margin of 42.94%. The business’s quarterly revenue was up 85.5% compared to the same quarter last year. During the same period in the previous year, the business posted $1.69 earnings per share. Analysts expect that Broadcom Inc. will post 10.37 EPS for the current year. Broadcom Dividend Announcement The firm also recently disclosed a quarterly dividend, which was paid on Wednesday, September 30th. Investors of record on Monday, September 21st were issued a $0.65 dividend. This represents a $2.60 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date was Monday, September 21st. Broadcom’s dividend payout ratio (DPR) is 33.21%.

Wall Street Analyst Weigh In AVGO has been the topic of several research analyst reports. Raymond James Financial reaffirmed an “outperform” rating and issued a $475.00 price objective (up from $450.00) on shares of Broadcom in a research note on Thursday, September 3rd. Rosenblatt Securities began coverage on Broadcom in a research note on Thursday, September 3rd. They set a “buy” rating and a $600.00 target price for the company. Wall Street Zen cut shares of Broadcom from a “strong-buy” rating to a “buy” rating in a report on Saturday, July 18th. Piper Sandler began coverage on shares of Broadcom in a report on Wednesday, September 9th. They issued an “overweight” rating and a $460.00 target price for the company. Finally, Morgan Stanley restated an “overweight” rating and issued a $505.00 price target (up from $502.00) on shares of Broadcom in a research note on Thursday, September 3rd. One research analyst has rated the stock with a Strong Buy rating, thirty-seven have given a Buy rating and three have given a Hold rating to the company. According to MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and an average price target of $527.20.

Check Out Our Latest Analysis on Broadcom

Key Broadcom News Here are the key news stories impacting Broadcom this week:

Positive Sentiment: Broadcom launched Arcot Scam Defense, a feature designed to help financial institutions block AI-enhanced social-engineering fraud in card-not-present transactions. The product could strengthen Broadcom’s infrastructure-software portfolio and create additional enterprise demand. Broadcom Launches Arcot Scam Defense to Block Social Engineering Fraud Positive Sentiment: Broadcom’s 10-year agreement with NTT DOCOMO to advance the telecommunications company’s private cloud using VMware Cloud Foundation reinforces the durability of its recurring software revenue and enterprise-cloud strategy. Broadcom to Advance NTT DOCOMO’s Private Cloud with VMware Cloud Foundation Positive Sentiment: Several analyses continue to highlight Broadcom as a leading beneficiary of custom AI-chip and networking demand. One report cited a 236% increase in AI-chip sales, while investors view its combination of custom silicon, AI networking and infrastructure software as a potential alternative to Nvidia. Broadcom Sees AI Chip Sales Up 236% Neutral Sentiment: Commentary comparing Broadcom with Apple and other semiconductor stocks presents AVGO as a long-term AI and infrastructure-software opportunity, but emphasizes that the investment case depends on sustained customer spending and execution. Apple vs. Broadcom: Which Tech Stock Is a Better Buy in 2026? Negative Sentiment: Semiconductor shares have pulled back amid interest-rate concerns, worries that AI infrastructure spending may be excessive, and broader warnings of a possible AI-stock bubble. Broadcom CEO Hock Tan’s comments comparing AI spending with a “casino” and warning about capital constraints have also unsettled some investors. Chip Stocks Have Pulled Back Broadcom Profile (Free Report)

Broadcom Inc (NASDAQ: AVGO) is a global technology company that designs, develops and supplies semiconductor and infrastructure software products. Its semiconductor solutions support data center, networking, broadband, wireless communications, storage, industrial and other electronic applications.

The company’s semiconductor portfolio includes networking and switching components, custom accelerators, connectivity and wireless devices, broadband equipment, optical products, storage controllers and related infrastructure technologies.

Read More Five stocks we like better than Broadcom GM Beat and Added a $20 Billion Buyback—Why Did the Stock Fall? Intercepting Growth: Karman Secures $218M Lockheed Martin Deal Tech Stocks Took a Hit—These 2 Pharma Stocks Are Near New Highs Chip Stocks Have Pulled Back—Here’s How 3 Semiconductor ETFs Stack Up for Investors

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

As the technology landscape evolves, investors must decide between established consumer giants and the infrastructure providers powering the next era. Choosing between Apple (AAPL +0.34%) and Broadcom (AVGO +0.70%) depends on your specific goals.

Apple is defined by its integrated ecosystem of premium hardware and recurring service revenue. Broadcom focuses on the critical backend components that drive data centers and enterprise software. Both companies are central to the modern economy, but they serve very different niches for everyday investors.

The case for AppleApple operates a massive global business centered on its iconic hardware devices and growing suite of digital services. The company sells the iPhone, Mac, and iPad to a loyal global user base while expanding its reach through the App Store and Apple Pay. Its distribution model relies on a mix of direct retail sales and partnerships with cellular carriers that account for roughly 60% of its net sales.

In its latest annual report, filed for fiscal 2025, revenue reached nearly $416.2 billion, a 6.4% increase over the prior year. This growth was accompanied by robust net income of approximately $112 billion. The company maintained a net margin of 26.9%, showing its ability to convert a significant portion of its total sales into actual profit.

As of Apple's September 2025 balance sheet, the debt-to-equity ratio, which measures total debt divided by shareholder equity, was roughly 1.5. The current ratio, a measure of the ability to pay short-term bills with short-term assets, was approximately 0.9. Apple generated free cash flow, or cash from operations minus capital expenditures, of nearly $98.8 billion during the fiscal year.

The case for BroadcomBroadcom has positioned itself as a titan among semiconductor stocks, providing essential networking and infrastructure software. The company reports high customer concentration, with its top five end customers accounting for approximately 40% of net revenue. Customer concentration like this adds a layer of risk to the business, as the loss of one major partner could significantly impact the bottom line.

In fiscal 2025, revenue reached approximately $63.9 billion, a substantial 23.9% increase from the previous fiscal year. This revenue jump led to net income of close to $23.1 billion for the period. Broadcom reported an impressive net margin of 36.2%, reflecting the high value of its proprietary semiconductor solutions and enterprise software contracts.

As of its November 2025 balance sheet, the company maintained a debt-to-equity ratio of roughly 0.8 and a current ratio of approximately 1.7. Free cash flow for the fiscal year was nearly $26.9 billion. Note that stock-based compensation accounted for roughly 27.5% of operating cash flow, inflating reported cash generation, since SBC is a non-cash expense added back in the cash flow statement.

Risk profile comparisonApple faces significant macroeconomic and geopolitical risks, particularly regarding its reliance on global trade stability and manufacturing in regions like China. The company is also navigating intense antitrust scrutiny and litigation regarding its App Store and search licensing deals with Alphabet (GOOGL -2.21%) (GOOG -2.03%). Supply chain concentration remains a concern, as the company depends on limited sources for several critical hardware components.

Broadcom relies on a small number of distributors and end customers, making it vulnerable to any shift in demand from its largest partners. The company depends heavily on contract manufacturers, specifically Taiwan Semiconductor Manufacturing (TSM +0.73%), for the majority of its wafer production. Furthermore, legal disputes over software licensing with companies like AT&T (T -4.12%) and potential cyclicality in the artificial intelligence industry present ongoing challenges to its growth trajectory.

Valuation comparisonBroadcom appears more attractive based on future earnings estimates, while Apple offers a lower entry point when comparing its market price to its total sales volume.

MetricAppleBroadcomForward P/E35.728.7P/S ratio10.717.9Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.

I'm a longtime Apple shareholder, so I'm a little biased here. (Just wanted to get that out of the way up front!)

That said, Broadcom has outperformed Apple in a major way over the past 10 years. Just because Apple was a good investment in my portfolio since I purchased it in 2012 (relative to my other stocks), doesn't mean it was the best investment.

AAPL data by YCharts

Of course, past performance is no indication of future results. Broadcom isn't guaranteed to continue posting impressive growth.

I think my main issue with Apple is that it's just so big, and it looks like it's closer to a potential ceiling than Broadcom. Both companies are valued in the trillions, but a $5 trillion market cap is kind of hard to wrap your head around. I wouldn't sell my Apple stock, but I don't think I would buy more at the moment (apart from the DRIP). I would prefer to buy shares of a company posting stronger growth, so Broadcom gets my vote here.

SummaryBroadcom is upgraded from Hold to Buy, with a blended fair value of $405 versus a $334.37 close.Record Q3 results, surging AI semiconductor revenue, and upgraded multi-year AI guidance drive the improved outlook.My base case model conservatively discounts management’s aggressive 2028 AI revenue forecasts, reflecting caution on vendor-financed demand.Risks include seller-funded backlog quality, AI capex durability, and potential margin pressure, but even conservative scenarios support a Buy rating. Sundry Photography/iStock Editorial via Getty Images

Introduction In late July, I started covering Broadcom (AVGO) with a Hold and my rating went against the tide of buy articles. I was cautious given numerous issues that later in September

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Broadcom (AVGO) signed a 10-year agreement to maintain and upgrade NTT DOCOMO's private cloud in Japan, extending their VMware partnership and preparing infrast

Robots are smarter than us now, says the man selling robots. Almost as if he has a stake in the matter...

The man in question is Nvidia (NVDA +0.07%) CEO Jensen Huang, who, to be fair, sells chips to every major artificial intelligence (AI) lab and, therefore, sees demand before the rest of us do. When he posted on X in September that "AGI has arrived," citing OpenAI's new GPT-6 and the Nvidia chips behind it, investors weighed the implications of such a breakthrough.

You should count yourself an interested party if you own any of the "Magnificent Seven" or companies that do business with those giants. Or even if you simply work for a living. You have a stake in whether artificial general intelligence (AGI) is on its way.

So, if the acronyms have started to blur together (AGI, API, ASI, there are so many), below is a crash course on what could be the most defining technology of the next decade. At the end, we'll share the top three stocks that stand to benefit from AGI's arrival.

What Is AGI, Anyway? In plain English, AGI is artificial intelligence that's as capable as a skilled worker at most jobs.

Today's AI models may be decent coders or data analysts, but they can't work for long stretches without supervision or pick up new skills as they go. AGI, however, could theoretically replace one of your co-workers, and the only tell would be the empty desk next to you.

For companies building AI, a more practical question is when AGI starts making money, so some measure the milestone in dollars. Huang, for instance, told podcaster Lex Fridman in March that true AGI would be capable of building a billion-dollar company (a bar he believes today's AI clears).

Microsoft (MSFT +0.05%) and OpenAI had more riding on the definition, since an official AGI declaration would have cut off Microsoft's rights to OpenAI's technology. In their contract, they defined AGI as systems capable of earning about $100 billion in profit for OpenAI's early investors, Microsoft among them. They've since scrapped that clause, since a term with no universally agreed definition is a shaky tripwire for a multi-billion dollar deal.

Where researchers find more common ground is in the stages along the way to AGI and beyond.

LevelWhat It Can DoWhere We Are1. Narrow AISpecializes in a specific task (chess, spam filters)Already built and widely used2. Generative AIWrites, codes, and more, but needs a human to check its workToday's chatbots, such as Gemini, Claude, and ChatGPT3. Artificial general
intelligenceDoes most work a capable human can, unsupervisedAchieved according to Huang, disputed by many researchers4. Artificial super
intelligenceBeats the best humans at nearly everythingHypothetical Today's best models are on that second rung, mostly because of the supervision problem mentioned above. Research group METR found that the longer the task, the worse AI does; and when left alone on a job that would take a person two workdays, top models succeed only about half the time. That's unreliable enough that your co-worker's desk remains occupied, for now.

GPT-6, the model Huang praised, is too new to have gone through METR's testing, so its reliability for long tasks is unproven. That leaves the open question of how close we are to AGI; and you'll notice each tech leader's view tends to line up with what's best for their business.

How Close Are We? It depends on whom you ask.

ALREADY HERE Jensen Huang, Nvidia Huang has declared AGI's arrival twice this year, first on a March podcast and again in his September post about GPT-6. Of the seven leaders on this list, he's the only one who says the threshold is already behind us.

NEXT MODEL Elon Musk, Tesla (TSLA +1.78%) and xAI Musk keeps setting deadlines for AGI, and he keeps missing them. He predicted in 2024 that AGI would arrive by 2025, then pushed his forecast to 2026. He now says xAI's next major model, Grok 5, will be the one to reach it.

BY DECEMBER Sam Altman, OpenAI Huang called OpenAI's new model AGI, but OpenAI's own CEO hasn't gone that far. A week before GPT-6 launched, Altman told Time that OpenAI was "not quite yet" there, though he expects an internal system he would call AGI by year-end. His chief research officer puts the company "80% of the way" to AGI.

IN SIGHT Mark Zuckerberg, Meta Platforms (META -2.03%) Zuckerberg rarely discusses AGI. He skipped straight to "superintelligence," or ASI, and Meta's annual report now lists delivering "personal superintelligence for everyone" as part of its vision. In a July 2025 letter, he wrote that Meta had "begun to see glimpses of our AI systems improving themselves."

EARLY 2030s Sundar Pichai, Alphabet (GOOG -0.76%) (GOOGL -0.85%) Pichai expects AGI shortly after 2030. Until then, he says, we're in an era of "artificial jagged intelligence," where models solve advanced coding and science problems yet stumble over tasks a child could handle. His caution hasn't slowed Alphabet's spending, though, since he told investors in July that competing at the frontier of AGI development is the company's first priority.

PROOF FIRST Andy Jassy, Amazon (AMZN +0.29%) Jassy hasn't put a date on AGI, and Amazon's AGI chief, Peter DeSantis, said in June that models need to be about 100 times more efficient before AI comes close. So Amazon makes sure it already has committed contracts for much of the new capacity it builds. AWS customers have signed $496 billion in contracts for future services, meaning they've committed to spending more than twice what Amazon itself is spending this year.

WRONG QUESTION Satya Nadella, Microsoft Nadella, the group's contrarian, described companies announcing their own AGI milestones as "nonsensical benchmark hacking" and believes AI should be measured by its ability to drive economic growth. He also cautioned that AI models are getting commoditized, so most of AI's profits will go to companies selling the software and cloud platforms that businesses run AI on. That view happens to serve Microsoft, which owns Windows, Office, and Azure.

Apple's (AAPL -0.75%) leaders, both former CEO Tim Cook and successor John Ternus, have said little about AGI, which tracks with how slowly the company has moved on AI. Apple seems to figure that however smart AI gets, it will need a place to live ... and Apple already owns that real estate, in more than a billion pockets.

Beyond the Magnificent 7, predictions for when AGI arrives are even more ambitious.

Masayoshi Son has reorganized SoftBank Group (SFTBY -1.42%) around artificial super intelligence. He told shareholders that AGI is less than 10 years away and that ASI, at roughly 10,000 times human intelligence, won't be far behind. SoftBank also owns most of Arm Holdings (ARM -2.13%) and a big slice of OpenAI; so Son, like Huang and others, profits from the future he predicts.

A few other patterns stand out here.

Most CEOs say soon. Of the leaders who offered a forecast, Pichai's timeline is the longest, and even he expects AGI within about five years. Many of the others say it's a couple of years off or has already happened. Caution hasn't slowed spending. Pichai thinks AGI is years away and Jassy hasn't given a timeline, yet Alphabet and Amazon each plan to spend around $200 billion or more on data centers and equipment this year. Some don't need the label. Microsoft and Meta are spending hundreds of billions of dollars on AI, but neither CEO claims AGI is here, likely because their business models don't depend on it. Microsoft rents AI through Azure and sells Copilot, and Meta uses AI to target ads, so both profit from better AI regardless. Setting CEOs' incentives aside, the model that set off this debate offers evidence for both camps. Here's how GPT-6 Astra, the OpenAI release behind Huang's post, stacks up.

Signs AGI is closeReasons for doubtAstra scored 99.9% on ARC-AGI-3, a test built to stump AI with unfamiliar puzzlesMost of Astra's top scores come from OpenAI's own testingAstra can control computer systems on its own, from spreadsheets to full websitesWhen Astra doesn't know an answer, it makes one up about half the time instead of admitting it, per evaluator Artificial AnalysisAstra scored 98% on FrontierMath Tier 4, a set of research-level math problemsIndependent testing found Astra only tied Anthropic's Claude Fable 5.1 on overall intelligence Regardless of a consensus around whether AGI is here or not, what's inarguable is that the gap between AI and AGI is shrinking with every new model release. For investors, the bigger opportunity is who profits on the way to AGI.

Who Cashes In on AGI The largest tech companies are betting record sums on AI's next leap. This year, Amazon, Alphabet, Meta, and Microsoft plan to spend up to $745 billion on capital projects (long-term investments like buildings and equipment). Most of that money will go toward AI data centers.

That's a heavy bill, even for these giants. JP Morgan Chase (JPM +0.59%) estimates the biggest cloud companies will spend about 93% of operating cash flow on AI this year, up from 33% in 2023. Alphabet even announced plans in June to sell up to $84.75 billion of new stock to help fund its build-out.

If AGI shows up sooner rather than later, these companies could earn back their spending many times over. But if progress stalls, the industry could end up with far more data centers than it can fill.

Meanwhile, I (Meilin here) see three companies as especially well-positioned to benefit from all that spending.

Nvidia: At the risk of stating the obvious, Nvidia's chips run a large share of the world's AI data centers. Last quarter, its sales more than doubled to $96.2 billion. Management expects about 90% growth this quarter, yet Nvidia still can't make chips fast enough to meet demand. Every step closer to AGI means labs need more computing power, and Nvidia is the company selling that horsepower. Broadcom (AVGO +0.18%): Broadcom designs custom AI chips for Alphabet, Meta, and OpenAI, all of whom want cheaper alternatives to Nvidia's pricey GPUs. Its AI chip sales more than tripled last quarter to $16.7 billion, and management expects AI revenue to roughly double to about $115 billion next fiscal year. That Broadcom and Nvidia both more than doubled AI sales suggests demand can support multiple winners. Alphabet: Alphabet develops frontier AI models of its own while renting computing power to peers building theirs. That rental business is booming, as Google Cloud revenue grew 82% last quarter to $24.8 billion. Its cloud backlog, which counts work customers have committed to but Alphabet hasn't delivered yet, reached $514 billion, and just over half of it should turn into revenue within two years. Notice what these picks share. None of them requires AGI to arrive on time -- or ever -- but each banks on other people believing it will. So far, that belief is holding up, judging by big tech's record spending on AI this year.

That cuts both ways, since big tech is increasingly borrowing to pay for its AI build-out and lenders have started charging more for that debt. Alphabet spent more cash than it brought in last quarter, which hadn't happened since it went public in 2004. If any major spender decided to slow its build-out, all three of these companies would likely feel it at once.

The Bottom Line Either of the following occurrences could expedite the timeline for AGI.

Models that learn on the job. Today's AI can't pick up new skills once its training ends. If a model could learn your company's work over its first few weeks like a new employee would, however, it would close one of AI's biggest remaining gaps. AI that works reliably for days. Top models now succeed about half the time on tasks that take a person two workdays. Once they can finish weeklong projects most of the time, AI could replace individual employees. That would go far beyond today's AI, which mostly handles single tasks despite what some companies suggest when announcing layoffs. Neither has happened yet, which gives investors time to prepare.

Know your exposure. The Magnificent 7 make up roughly a third of the S&P 500, so an index fund already ties a big share of your money to the AI build-out. Add in any other tech stocks you own, and your stake is likely bigger than you think. Favor companies with paying customers. Look for AI businesses with rising sales and signed contracts (e.g., Google Cloud's $514 billion backlog) over companies counting on a breakthrough years from now. Think in years. If AGI is a decade out, there's no rush to buy everything at once. Dollar-cost averaging lowers the risk of buying at a peak. When AGI arrives, you won't need to hear it from the man selling robots, since it'll be written all over the economy and in your portfolios.

Broadcom Inc. continues its selloff and dropped by another 19% since my last article. But I think that Mr. Market is missing the big picture with AVGO. AVGO's fundamentals are robust: 86% revenue growth, 127% semiconductor segment surge, and operating margins rising to 50%.

Frank Rimerman Advisors LLC lifted its stake in shares of Broadcom Inc. (NASDAQ: AVGO) by 6.0% during the undefined quarter, according to the company in its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 89,222 shares of the semiconductor manufacturer's stock after purchasing an additional 5,070 shares during

Robertson Stephens Wealth Management LLC raised its holdings in Broadcom Inc. (NASDAQ: AVGO) by 18.3% during the third quarter, according to its most recent disclosure with the Securities and Exchange Commission. The firm owned 24,179 shares of the semiconductor manufacturer's stock after purchasing an additional 3,747 shares during the quarter. Robertson Stephens Wealth

Generali Investments Management Co LLC reduced its stake in Broadcom Inc. (NASDAQ: AVGO) by 16.0% in the undefined quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The institutional investor owned 39,753 shares of the semiconductor manufacturer's stock after selling 7,598 shares during the period. Broadcom

Signature Resources Capital Management LLC increased its holdings in Broadcom Inc. (NASDAQ: AVGO) by 337.3% in the third quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 3,634 shares of the semiconductor manufacturer's stock after buying an additional 2,803 shares during the quarter.

Artificial intelligence (AI) stocks are flashing warning signs as semiconductor shares suffer their steepest relative decline in years.

In this line, the Semiconductor Index (SOX) has fallen for eight consecutive trading sessions, while global technology equity funds recorded $4.8 billion in outflows, even as the broader market attracted capital, according to data shared by The Kobeissi Letter on October 19.

The SOX-to-S&P 500 ratio has dropped to 1.45, its lowest level since April 2026. Since its mid-June peak, the ratio has declined 0.46 points, or 24%. Over the same period, the Philadelphia Semiconductor Index has fallen 24%, while the S&P 500 has gained 2%.

Semiconductor Index-to-S&P 500 ratio. Source: Bloomberg The decline echoes the aftermath of the 2000 Dot-com bubble, although the ratio remains 142% above its 2022 low of 0.60. Some AI infrastructure companies continue to report strong demand and earnings growth, but the reversal highlights the risks of concentrated AI exposure as investor sentiment shifts.

The SOX’s eight-session losing streak through October 16 was its longest since the 2008 financial crisis. The index fell 3.83% on October 16, extending its decline to 16% from its October 6 advance.

The selloff has affected major chipmakers, including Nvidia (NASDAQ: NVDA), Advanced Micro Devices (NASDAQ: AMD), Broadcom (NASDAQ: AVGO), Micron Technology (NASDAQ: MU) and Intel (NASDAQ: INTC).

Investors are questioning whether AI spending will generate sufficient returns to justify current valuations, particularly amid rising financing costs and concerns about future demand.

Technology funds outflows  On the other hand, global technology equity funds recorded $4.8 billion in outflows in the week ending October 14, their largest weekly withdrawal in at least five weeks.

U.S. technology funds accounted for $5.2 billion in outflows. Meanwhile, global equity funds attracted $20 billion, including $13 billion into US equities, suggesting investors were rotating out of technology rather than abandoning stocks. The shift followed $5.4 billion in technology fund inflows the previous week.

BREAKING: Global technology equity funds recorded -$4.8 billion in outflows in the week ending October 14th, their largest weekly outflow in at least 5 weeks.

US tech funds drove the withdrawals, with -$5.2 billion in outflows.

Meanwhile, all global equity funds attracted… pic.twitter.com/mzQAw7nnn4

— The Kobeissi Letter (@KobeissiLetter) October 19, 2026 Investors are also scrutinizing the profitability of AI investments.  In this vein, AllianceBernstein portfolio manager James Russo expects AI capital expenditure growth to slow in 2027 and 2028 as borrowing costs rise. 

TS Lombard economist Dario Perkins has warned that rising debt, excess chip inventories and potential project cancellations could undermine the investment cycle. Hyperscaler spending could reach $1.2 trillion, but the returns remain uncertain.

However, the AI boom differs from the dot-com bubble. For instance, this is highlighted by the fact that Fidelity noted in February 2026 that technology valuations remained below dot-com-era extremes and companies had largely funded AI spending from earnings rather than debt.

Whether the selloff deepens will depend on whether future AI earnings and cash flows justify current valuations. 

Sustained demand could make the decline a correction, while disappointing returns could trigger a prolonged repricing.

Featured image via Shutterstock

TOKYO, Oct. 19, 2026 (GLOBE NEWSWIRE) -- Broadcom Inc. (NASDAQ: AVGO), a global technology leader that designs, develops, and supplies semiconductor and infrastructure software solutions, today announced that it has signed a 10-year agreement with NTT DOCOMO, INC. (DOCOMO) to continuously advance the private cloud that will underpin the company’s digital services over the next decade. The agreement will enable DOCOMO to continue delivering reliable digital services to its customers amid a rapidly changing business environment, marked by the expanding use of AI and increasingly sophisticated cyberattacks.

Since 2019, VMware, now Broadcom, has worked closely with DOCOMO to build and operate its private cloud with VMware Cloud Foundation (VCF) at its core. Building on this collaboration, the two companies will now align their long-term technology roadmaps to strengthen DOCOMO’s service infrastructure.

This is Broadcom Japan’s first (1) 10-year comprehensive agreement covering licenses, technical assistance and maintenance support for VMware products (2), including VCF.

Through this agreement, Broadcom will combine DOCOMO’s operational expertise in large-scale infrastructure with its technology and engineering resources to further improve the continuity, security and delivery speed of DOCOMO’s service infrastructure.

With VCF at the core, Broadcom will drive technical collaboration and operational excellence across three focus areas:

Continuous Service Availability
Leveraging VCF, DOCOMO will strengthen its ability to rapidly upgrade and maintain systems without service interruptions. Unified management of servers, storage, and networking will enable flexible capacity expansion to support future service growth. In addition, autonomous placement and scaling of system resources based on usage will maintain stable service quality even during traffic spikes. VCF Forte Support, which offers Broadcom’s highest-level service-level objectives (SLOs), will help sustain continuous system operations.

Proactive Security and Resilience
To counter increasingly sophisticated cyberattacks and emerging AI-driven threats, DOCOMO will further strengthen rapid and continuous security measures by leveraging VCF capabilities that enable timely patching, together with predictive anomaly detection. Continuous visibility across the entire system through VCF, combined with AIOps initiatives, will enable early detection of and rapid response to anomalies. Close engagement with dedicated Support Account Managers (SAM) and Technical Account Managers (TAM) will also enable DOCOMO to quickly incorporate the latest technologies and security measures.

Accelerated Service Delivery
By leveraging VMware vSphere Kubernetes Service (VKS), the native VCF Kubernetes runtime, DOCOMO will run virtual machines and containers on a common platform and use development and operations automation to streamline everything from environment provisioning to service delivery. Automating development, testing and release processes will enable new services and features to be rolled out in shorter cycles, allowing DOCOMO to respond quickly to evolving customer needs and market conditions.

Building on this long-term agreement, Broadcom will embark on the evolution of DOCOMO’s service infrastructure into a next-generation platform that will bring together virtual machines, containers and AI.

Leveraging a VCF-based private cloud platform, the two companies will jointly drive the automation and advancement of AI-driven operations that are expected to contribute to further improvements in service quality and delivery speed.

Broadcom will continue to collaborate with DOCOMO to ensure that its service infrastructure evolves through the flexible adoption of new technologies, in anticipation of future shifts in technology and the business environment, such as the expanding use of AI, new AI-driven threats, 6G and IOWN.

Executive Comments

Hiroshi Ishimaru, General Manager, Service Design Department, NTT DOCOMO, INC.
“At DOCOMO, we are enhancing our service infrastructure to ensure the stability and security that allow customers to use our digital services with peace of mind, while enabling it to respond flexibly and quickly to changes in technology and the market.”

“VMware products have long been used across a range of our systems, and through this long-term comprehensive agreement, we will further strengthen our technical collaboration with Broadcom. Going forward, while maintaining the reliable delivery of our existing services, we aim to build a service infrastructure that delivers new value to customers more quickly and reliably, with an eye toward future technological advances such as the expanding use of AI.”

Paul Turner, Chief Product Officer, VMware Cloud Foundation Division, Broadcom
“We are honored to continue to partner with DOCOMO, a company that supports Japan's social infrastructure and digital lifestyles, on a long-term initiative for the next decade.”

“Over the past seven years, we have built a strong technical collaboration, and this agreement takes that relationship further, reflecting our shared commitment to continuously enhancing DOCOMO's service infrastructure over the long term. With VMware Cloud Foundation at the core, Broadcom will provide a private cloud platform that runs virtual machines, containers, and AI workloads on a common foundation. Our engineering teams will work closely with DOCOMO's so the company can continue to deliver secure, reliable digital services quickly.”

About Broadcom
Broadcom Inc. (NASDAQ: AVGO) is a technology leader that designs, develops, and supplies semiconductors and infrastructure software for global organizations’ complex, mission-critical needs. Broadcom combines long-term R&D investment with superb execution to deliver the best technology, at scale. Broadcom is a Delaware corporation headquartered in Palo Alto, CA. For more information, visit www.broadcom.com.

Notes and Company Information

(1)As a 10-year comprehensive agreement in Japan covering licenses, technical assistance and maintenance support for VMware products, as of October 20, 2026.(2)VMware products and related technical assistance and support covered by the agreement include: VMware Cloud Foundation, VMware Avi Load Balancer, VMware vDefend, VMware Tanzu Platform, Support Account Manager (SAM), Technical Account Manager (TAM) and VCF Forte Support.   Media Contacts:

Roger Fortier
VMware Cloud Foundation Division, Broadcom
+1.408.348.1569
[email protected]

Eloy Ontiveros
Broadcom Global Communications
+1.650.427.6145
[email protected]

Semiconductor stocks have come under pressure as investors question the durability of the AI infrastructure build-out, driven by financing concerns alongside uncertain AI utility and revenue projections. Gartner recently projected that AI revenue would not be able to support the current build-out and that the neocloud market would collapse by 2030.

However, cloud computing companies are seeing insatiable demand for AI infrastructure and seeing strong returns on their chip and networking investments. Even historically conservative companies like ASML Holding and Taiwan Semiconductor Manufacturing (TSM +2.33%) have aggressively expanded their capacity to keep pace with surging demand for their machines and services. This would point to the current AI boom having a long, continued runway.

With the stocks under pressure, let's look at five semiconductor stocks to buy on the dip.

Nvidia NVDA Nvidia$218.24+$4.11 (+1.92%)

NASDAQ · As of 1:04 PM ET 10/19/26

Nvidia (NVDA +1.92%) is the primary company fueling the AI boom with its graphics processing units (GPUs). These are the main chips used to run AI workloads, and as a result, Nvidia continues to see surging growth. Meanwhile, the company has created a wide moat in the chip market for AI training, as most original AI code was written on its CUDA software platform and optimized for its GPUs.

The stock trades at a forward price-to-earnings (P/E) of just above 13.5 based on estimates for fiscal 2028 (ending January 2028), That makes it a steal at these levels if the AI infrastructure boom continues.

Broadcom AVGO Broadcom$337.05+$8.30 (+2.52%)

NASDAQ · As of 1:01 PM ET 10/19/26

While Nvidia dominates the merchant AI accelerator market, Broadcom (AVGO +2.52%) is the go-to company in the custom AI chip market. Hyperscalers have been increasingly designing their own custom chips to lower costs, and one of the main companies they turn to for help in developing these AI ASICs (application-specific integrated circuits) is Broadcom. Among its customers are Alphabet, Anthropic, OpenAI, and Meta Platforms. With surging demand, Broadcom sees its custom chip revenue quadrupling to $230 billion over the next two years. With the stock trading at a forward P/E of 11 times fiscal 2028 estimates, the stock is a buy.

Advanced Micro Devices AMD Advanced Micro Devices$543.53+$14.78 (+2.79%)

NASDAQ · As of 1:03 PM ET 10/19/26

Advanced Micro Devices (AMD +2.79%) is riding two powerful waves in inference and agentic AI. Its chiplet GPUs, which can be packaged with more memory, are great for inference, and the company has gotten large GPU commitments from OpenAI, Meta Platforms, and Anthropic for its GPUs. At the same time, AMD is seeing demand surge for its central processing units (CPUs), given the rise of agentic AI. Given its enormous growth opportunities ahead, the stock looks like a buy on the recent dip.

Image source: Getty Images.

Cerebras Systems Arguably the highest risk-reward name on the list is Cerebras Systems (CBRS -3.77%). Its wafer-sized SRAM-based chips provide lightning-fast speeds for inference. The company claims its systems provide 30 times the inference speeds versus GPUs and are six times faster than Nvidia's Groq-based language processing units (LPUs). However, they are also pricey and are only sold as part of a complete system due to their power consumption management and cooling requirements.

The company has signed a large deal with OpenAI and has formed a partnership with AMD on a disaggregated solution where its system handles the important decode phase of inference. If the company's systems can break into the mainstream, the stock could have huge upside. The recent dip, meanwhile, has sent the stock below its recent IPO price.

Taiwan Semiconductor Manufacturing As the largest foundry in the world, Taiwan Semiconductor Manufacturing is responsible for manufacturing the vast majority of advanced logic chips, including GPUs, custom AI ASICs, and CPUs. As such, it is riding the same trends that every other company on this list is benefiting from right now. At the same time, as the only chip manufacturer that has consistently shown it can make these advanced chips at high yields (low defect rates) at scale, it has become a vital cog in the semiconductor value chain while commanding strong pricing power.

At a forward P/E of 18 based on 2027 analyst estimates, the stock is attractively valued and a buy on this semiconductor sector pullback.

Geoffrey Seiler has positions in Advanced Micro Devices, Alphabet, and Broadcom. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Alphabet, Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.

Nvidia's quiet move to insure loans for struggling neocloud customers signals a risk that most AI investors are ignoring, and it points straight to why one rival chipmaker keeps winning the customers worth having.

I bought more Broadcom (NASDAQ:AVGO | AVGO Price Prediction) last week, and I expect to keep following the stock closely. Shares fell 9.07% in the week ending October 16 to $328.75. To me, that drop marked down the AI business I trust most, and I added.

Why My Money Follows Custom Silicon My thesis rests on one fact: Broadcom co-designs the chips the largest AI builders run on, and those customers commit to years of product plans. On the September call, Hock Tan said that “when you co-develop a chip that is optimized for your particular LLM workloads, you will outperform any GPU,” and added that customers “can do all this at half the cost of a GPU.” When a customer gets that kind of cost advantage, it comes back for the next generation, and the one after that.

Three Receipts Behind Every Purchase First, growth. AI semiconductor revenue reached $16.70 billion in fiscal Q3, up 221% year over year. Management guided Q4 to $21.70 billion, up 236%, and laid out roughly $115 billion in AI revenue for fiscal 2027 and $230 billion for fiscal 2028. It also said it has already secured the supply for both years.

Second, cash and income. Free cash flow hit $13.7 billion, or 46% of revenue. The $0.65 quarterly dividend reflects the 15th consecutive annual increase, and Broadcom still retired $5.6 billion of longer-dated debt in the quarter. It has also beaten EPS estimates 10 quarters in a row.

Third, valuation. Tan said Broadcom is “very much on target to exceed $30 in earnings per share in fiscal 2028.” At today’s price, that works out to about 11x the target. That multiple supports the valuation case.

Why I Pass on NVIDIA and Marvell The name most investors grab first is NVIDIA (NASDAQ:NVDA). What keeps me away is a recent report that NVIDIA approached insurers about structures that could insure “against losses on loans to upstart cloud computing companies or Neo clouds” in case those borrowers default and the chips they put up cannot be resold for enough to repay lenders. I want my AI exposure tied to customers with deep balance sheets. NVIDIA also pays just $0.28 per share in annual dividends and trades at a forward P/E of 25.

Marvell Technology (NASDAQ:MRVL) is the other custom chip designer, but it trades at a forward P/E of 62 and pays $0.24 per share annually. Broadcom pays more than that every quarter.

Risk That Could Hurt This Position Concentration is the real danger. The company counts six XPU customers, and four of them account for most of the scale. It also offers residual value guarantees through its AI financing platform with Apollo and Blackstone, and management declined to give a maximum exposure figure. Constraints on land, power, and data center buildings could push deployments back.

I still hold my thesis because those customers sign long-term agreements. Broadcom expects to deliver multi-tens of billions of dollars of TPUs annually to Google alone. Management also says “our demand actually exceeds this outlook,” and the company has a $24 billion cash reserve.

What Could Move Broadcom Next Broadcom reports again on December 9, 2026, against guidance for $34.80 billion in revenue, up 93%. I plan to watch AI revenue and the growth in the dividend. While NVIDIA works on insuring its neocloud customers, Broadcom keeps signing hyperscaler contracts and raising its payout, and that contrast supports my thesis.

Contact [email protected] for any questions or corrections.

TD Waterhouse Canada Inc. reduced its position in shares of Broadcom Inc. (NASDAQ:AVGO – Free Report) by 7.9% during the 3rd quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The institutional investor owned 1,077,815 shares of the semiconductor manufacturer’s stock after selling 92,526 shares during the quarter. Broadcom accounts for approximately 1.0% of TD Waterhouse Canada Inc.’s investment portfolio, making the stock its 26th biggest holding. TD Waterhouse Canada Inc.’s holdings in Broadcom were worth $368,720,000 at the end of the most recent quarter.

A number of other institutional investors have also recently modified their holdings of AVGO. Networth Advisors LLC raised its holdings in Broadcom by 546.2% in the 1st quarter. Networth Advisors LLC now owns 84 shares of the semiconductor manufacturer’s stock worth $26,000 after purchasing an additional 71 shares during the period. Core Capital Management & Research inc. purchased a new position in Broadcom during the second quarter worth approximately $31,000. Harborfront Financial Group LLC acquired a new stake in Broadcom in the second quarter valued at approximately $38,000. IMG Wealth Management Inc. acquired a new stake in Broadcom in the second quarter valued at approximately $64,000. Finally, Gilpin Wealth Management LLC increased its position in shares of Broadcom by 290.2% in the third quarter. Gilpin Wealth Management LLC now owns 199 shares of the semiconductor manufacturer’s stock valued at $70,000 after buying an additional 148 shares in the last quarter. 76.43% of the stock is currently owned by institutional investors and hedge funds.

Broadcom Stock Performance Shares of Broadcom stock opened at $328.75 on Monday. The business’s 50 day moving average price is $364.33 and its 200 day moving average price is $384.14. The company has a market cap of $1.57 trillion, a price-to-earnings ratio of 41.99 and a beta of 1.46. The company has a debt-to-equity ratio of 0.57, a quick ratio of 2.29 and a current ratio of 2.50. Broadcom Inc. has a one year low of $289.96 and a one year high of $495.00.

Broadcom (NASDAQ:AVGO – Get Free Report) last released its quarterly earnings data on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 earnings per share for the quarter, topping analysts’ consensus estimates of $3.22 by $0.10. Broadcom had a return on equity of 48.33% and a net margin of 42.94%. The company had revenue of $29.59 billion for the quarter, compared to analyst estimates of $29.24 billion. During the same quarter in the previous year, the company posted $1.69 earnings per share. The firm’s revenue for the quarter was up 85.5% compared to the same quarter last year. On average, research analysts predict that Broadcom Inc. will post 10.37 EPS for the current year. Broadcom Dividend Announcement The company also recently disclosed a quarterly dividend, which was paid on Wednesday, September 30th. Investors of record on Monday, September 21st were given a dividend of $0.65 per share. This represents a $2.60 annualized dividend and a yield of 0.8%. The ex-dividend date was Monday, September 21st. Broadcom’s dividend payout ratio (DPR) is presently 33.21%.

Wall Street Analysts Forecast Growth Several brokerages have recently weighed in on AVGO. HSBC reduced their target price on Broadcom from $600.00 to $560.00 and set a “buy” rating for the company in a research note on Thursday, September 3rd. Raymond James Financial reissued an “outperform” rating and issued a $475.00 price target (up from $450.00) on shares of Broadcom in a report on Thursday, September 3rd. The Goldman Sachs Group upped their price objective on shares of Broadcom from $525.00 to $540.00 and gave the stock a “buy” rating in a research report on Thursday, September 3rd. President Capital increased their price objective on shares of Broadcom from $520.00 to $546.00 and gave the company a “buy” rating in a report on Thursday, September 3rd. Finally, BNP Paribas Exane boosted their target price on shares of Broadcom from $675.00 to $715.00 and gave the stock an “outperform” rating in a research note on Friday, September 4th. One research analyst has rated the stock with a Strong Buy rating, thirty-seven have assigned a Buy rating and three have issued a Hold rating to the stock. Based on data from MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus price target of $527.20.

Check Out Our Latest Stock Report on Broadcom

Trending Headlines about Broadcom Here are the key news stories impacting Broadcom this week:

Positive Sentiment: Broadcom’s long-term AI opportunity remains attractive because hyperscalers and companies including OpenAI, Anthropic, Alphabet and Meta are adopting custom-designed chips and high-speed networking as alternatives to Nvidia GPUs. Analysts and investors continue to view Broadcom’s combination of custom silicon, networking and infrastructure software as a potential long-term growth engine. Will Broadcom Rejoin the $2 Trillion Club in 2027? Positive Sentiment: Erste Group raised its FY2027 earnings forecast for Broadcom, while roughly $121.5 million of net ETF purchases on Oct. 14 indicate that some institutional investors continue to add exposure. Broadcom FY2027 Earnings Forecast Raised by Erste Group Bank Neutral Sentiment: Broadcom’s reported plan to arrange $60 billion in financing connected to Anthropic could expand its AI relationship and customer opportunity, but it also increases the financial stakes and execution risk of the company’s AI strategy. Broadcom’s Anthropic Bet Gets Bigger Neutral Sentiment: Broadcom and CoreWeave rejected tokenized shares offered through the OKX/ICE venue, limiting a potential new trading channel but signaling caution around digital representations of public-company stock. CoreWeave, Broadcom Reject Tokenized Shares Negative Sentiment: CEO Hock Tan warned that rising financing costs and speculative, “casino-like” AI investing could slow expansion. His comments raise concerns that AI customers may reduce capital spending or struggle to turn heavy infrastructure investments into profits, weighing particularly on custom-AI-chip suppliers. Broadcom Falls as AI Capital Warning Weighs Negative Sentiment: Higher-than-expected inflation and expectations for higher interest rates are prompting investors to rotate away from expensive technology and AI stocks. A Gartner warning that many neocloud companies could fail or consolidate by 2030 has intensified fears of an AI infrastructure spending mismatch. MarketBeat Week in Review Negative Sentiment: Reports that Apple may cut iPhone 18 Pro component orders create an additional demand concern for suppliers, although Broadcom’s exposure and potential impact appear less direct than for some peers. Apple Cut iPhone 18 Orders Broadcom Company Profile (Free Report)

Broadcom Inc (NASDAQ: AVGO) is a global technology company that designs, develops and supplies semiconductor and infrastructure software products. Its semiconductor solutions support data center, networking, broadband, wireless communications, storage, industrial and other electronic applications.

The company’s semiconductor portfolio includes networking and switching components, custom accelerators, connectivity and wireless devices, broadband equipment, optical products, storage controllers and related infrastructure technologies.

Further Reading Five stocks we like better than Broadcom These 3 Green Stocks Have a Growth Story That Goes Far Beyond Washington Meta Claims Frontier-Class AI Status With New Muse Wonder Models Berkshire Just Backed This Little-Known Stock—Should You Chase It? Broadcom’s CEO Sees Years of AI Demand But Warns of a Bigger Threat to the Boom Want to see what other hedge funds are holding AVGO? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Broadcom Inc. (NASDAQ:AVGO – Free Report).

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Broadcom stock is bouncing back today as investors bought the dip in artificial intelligence (AI) companies. After bottoming at $328 on Friday, the stock rebounded to $340, a move that coincided with the surge in other artificial intelligence firms like CoreWeave and Nebius.