Broadcom's expanding portfolio and strong financials make AVGO stock a buy

From Nasdaq: 2025-05-21 12:23:00

Broadcom (AVGO) shares have surged 37.2% in the past month, outperforming peers like NVIDIA, AMD, and Marvell Technology. The company’s expanding portfolio, rich partner base, strong balance sheet, and impressive free cash flow contribute to its success.

Broadcom’s strategy of updating its portfolio frequently, including the launch of its third-generation 200G per lane Co-Packaged Optics product line, has been a key catalyst for growth. Strong demand for application-specific integrated chips (ASICs) designed to support AI and machine learning further boosts top-line growth.

Broadcom sees massive opportunities in the AI space, with three hyperscaler customers planning to deploy 1 million XPU clusters each by 2027. The company’s focus on delivering AI-powered security and expanding its clientele with new partners like Alphabet, Meta Platforms, and Dell Technologies drives strong revenues.

Benefiting from a strong balance sheet and impressive free cash flow, Broadcom remains shareholder-friendly. The company recently announced a new share repurchase program to buy back up to $10 billion of its common stock through Dec. 31, 2025.

Broadcom’s earnings estimate for fiscal 2025 shows an upward trend, with a consensus estimate of $6.60 per share, indicating 35.52% year-over-year growth. The company’s stock is trading at a premium compared to peers, reflecting its strong growth potential in the semiconductor industry.

With a Zacks Rank #2 (Buy) and a Growth Score of A, Broadcom presents a strong investment opportunity. The company’s expanding AI portfolio, rich partner base, and solid financials justify its premium valuation in the market.



Read more at Nasdaq: Does Broadcom’s Expanding Portfolio Make the AVGO Stock a Buy?