Broadcom (AVGO) shares closed at $326.02, down 19.7% from the 52-week high due to soft gross margin guidance for fiscal 2026. Strong AI revenues from XPUs drove fiscal 2025 growth to $20 billion. AVGO’s expanding clientele, including Anthropic, led to $11 billion in orders. First-quarter fiscal 2026 AI revenues are expected to double year over year to $8.2 billion.

AVGO’s consolidated backlog hit $162 billion in fiscal 2025, with strong demand for Tomahawk 6 products and Jericho 4 Ethernet fabric router. AVGO’s portfolio expanded with Wi-Fi 8 solutions and Thor Ultra. The company has a rich partner base including OpenAI, Walmart, NVIDIA, and more. Fiscal 2026 Semiconductor revenues are expected to grow 50% year over year.

Earnings estimates show positive trends for AVGO, with fiscal 2026 earnings expected to grow by 44.9% and revenues by 44.8% from fiscal 2025. AVGO stock is currently trading at a premium, with a Value Score of D. The forward 12-month price/sales ratio is 17.26X, higher than the sector average.

Broadcom’s expanding AI portfolio and rich partner base justify its premium valuation. With a Zacks Rank #2 (Buy), investors should consider accumulating AVGO stock. Zacks Top 10 Stocks for 2026 are set to be released on January 5, historically outperforming the S&P 500. Investors can anticipate top picks for the new year.

Read more at Nasdaq: AVGO Stock Drops 20% From 52-Week High: Should You Buy on the Dip?