Broadcom’s (AVGO) recent march to a $2 trillion valuation was no accident. It happened due to the market’s renewed interest in artificial intelligence (AI) and a series of catalysts that strengthened its key role in next-generation computing. On April 22, Broadcom briefly crossed the $2 trillion market capitalization mark after AVGO stock rallied to record highs, including a move near $422. The trigger wasn’t just its deepening partnership with Alphabet's (GOOGL) Google, but a powerful mix of AI-fueled earnings growth and blockbuster multi-year deals with Anthropic and other AI leaders.
Together, these forces pushed Broadcom into the exclusive $2 trillion club, signaling that the market now views the firm as more than just a semiconductor company. While Broadcom shares have surged 16% year-to-date (YTD), outperforming the tech-heavy Nasdaq Composite ($NASX), the stock has also rallied 32% in just the last month alone.
Is AVGO stock a good buy now?
Why Broadcom’s Strategic Partnerships Matter
Broadcom and Google’s partnership is becoming deeper than just a typical supplier relationship. Recently, Google announced its move to split its latest Tensor Processing Units (TPUs) into two specialized chips, with one aimed at training and the other targeting inference. This move dramatically increases both the complexity and the scale of chip demand — and, being Google’s supplier for these specialized chips, it directly benefits Broadcom. The company's agreement with Google extends through 2031, effectively landing itself deep within Google’s AI infrastructure roadmap and making it difficult to replace.
At the same time, Broadcom's collaboration with Anthropic is expected to unlock roughly 3.5 gigawatts (GW) of compute capacity starting in 2027, signaling massive scaling potential. These strategic deals are multi-year commitments that provide visibility, reduce customer churn risk, and lock in recurring AI-driven revenue streams.
Explosive Growth Backed by AI Demand
Broadcom’s first-quarter report is also one of the reasons the market rewarded AVGO stock so aggressively. Revenue surged 29% year-over-year (YOY) to $19.31 billion. Semiconductor revenue reached $12.5 billion, up 52% YOY, accounting for 65% of total revenue. Notably, AI semiconductor revenue exploded by 106% to $8.4 billion from the prior-year quarter.
What’s even more impressive is that Broadcom expects semiconductor revenue to reach $14.8 billion in Q2, marking 76% YOY growth. Within that, AI semiconductor revenue is projected at $10.7 billion, representing staggering 140% growth. This growth is the result of its custom AI accelerators (XPUs) deployed across major customers, including hyperscalers and AI leaders like Google, Meta Platforms (META), and OpenAI. Broadcom revealed it is now working with six major AI customers, with multi-year, multi-gigawatt deployment plans already in place.
Broadcom plans to generate more than $100 billion in AI chip revenue by 2027. This single number also motivated investors to push the stock to new highs. Beyond chips, Broadcom is capitalizing on AI networking, with networking revenue up 60% YOY in Q1. Broadcom generated free cash flow of $8 billion during the quarter, accounting for 41% of revenue, and returned $10.9 billion to shareholders in a single quarter through dividends and share buybacks. The company’s adjusted EPS increased 28% YOY in Q1, and analysts predict EPS growth of 77% for the full fiscal year, followed by 64% growth in fiscal 2027.
Is AVGO Stock a Buy Now?
Broadcom’s fundamentals are undeniably strong. Very few semiconductor companies are delivering this level of hypergrowth while maintaining strong margins and massive free cash flow. The company's position at the center of the AI infrastructure boom, combined with deep partnerships with AI leaders, has helped it earn its trillion-dollar valuation. Broadcom is no longer a hidden long-term AI opportunity, but it remains a name that investors should strongly consider.
Wall Street cheered Broadcom’s game-changing deals with Google and Anthropic. Analysts have a consensus “Strong Buy" rating on AVGO stock. Of the 42 analysts with coverage, 35 analysts have a “Strong Buy,” three have a “Moderate Buy” rating, and four recommend a “Hold.” Based on the average target price of $469.94, the stock has potential upside of 18% from current levels. Plus, the high price target of $630 suggests shares could climb by 58% over the next 12 months.
On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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