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Stonkometer: Broadcom valuation, my model
Fact Key numbers from SEC filings
Market value$1.65T$345.00 a share on 2026-10-29
Revenue, last 12 months$89.1BQ3 FY26: $29.6B, up 86%
AI chips, Q3 FY26$16.7Bup 221%
Operating income, Q3 FY26$16.0B54% of revenue; 68% before stock pay and amortisation
Next quarter (guidance)$34.8BAI $21.7B, up 236%
Net debt$35B2 Aug 2026
Value over time
Total market value
$1T$2T$3T
Nov 25Feb 26May 26Aug 26
$1.65T -6% since Oct 2025
$1T$2T$3T
202420252026
$1.65T 4.7x since Oct 2023
$1T$2T$3T
20222023202420252026
$1.65T 7.5x since Oct 2021
$1T$2T$3T
201120142017202020232026
$1.65T 383x since 2010
Total value, not price per share: share counts change with fundraising, stock pay and splits.
What today's market value implies
If Broadcom is worth $1.65T today, our model says this has to happen by 2036:
Revenue in 2036$400B3.4x today's $118B, growing 13% a year
Net profit in 2036$181B1.6x what Apple earned in 2025 (about $110B)
Operating margin in 203657%our middle-case margins for each business line
Value today / revenue14xthe S&P 500 average is about 3x
Growth vs our middle case-3 ptsa year, on every business line
Assumption Solved from our model: middle-case margins, 25x earnings in 2036, a 10.0% required return and 0.5% new shares a year. The lab below opens on this "market's view"; change any number there.
Assumption Starting cases are Stonkometer values, not forecasts. The needle reads your inputs. Not sure what to assume? Answer 7 quick questions.
The market price needs about 3 points less growth a year than our middle case, on every business line.
Revenue by business line
Scenarios vs today
Defaults and conventions
Fact Revenue, cash, debt and share counts come from the filings or reports listed under Sources (data as of 2026-10-29).
Fact Currency: nominal US dollars. All four companies report in US$, so there is no FX conversion.
Assumption Inflation is not a separate input: growth rates and the risk-free rate are nominal, so they already include it.
Assumption Risk-free rate 5% (the 10-year US Treasury yield was 4.99% on 26 Oct 2026); risk premium 5%; required return 10% a year.
Assumption Tax 21% on profits (US federal rate); dilution 0.5% a year; 10-year horizon; magic revenue earns 30%.
Assumption Today's operating margins per business line (AI chips 55%, Other chips 52%, Infrastructure software 76%) are Stonkometer estimates from the latest filings.
Assumption Bear, middle and bull values and bet sizes, margins and chances.
Change any of them in Advanced mode. Full list on the method page.
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Build your assumptions: 7 questions
Not sure what to put in the sliders? Answer in plain terms: prices, customers, and how much the big risks worry you. Each question starts with a Fact (or Our view for rough benchmarks); your answer is your Assumption. The answer choices are ours, and skipped questions use the middle one.
0 of 7 answered
Moonshot explorer Our view
Markets that don't exist yet but could one day pay Broadcom. Each one is valued like an option: the chance it happens, times the profit if it does, discounted back to today. The market sizes, shares, chances and dates are our guesses: move them, and switch on the ones you believe in to add them to your model.
Light instead of copper inside AI clusters
Optical switches and links that join millions of AI chips with far less power.
Fact Broadcom ships co-packaged optics switches, with lasers built into the chip package.
What would have to be true:
AI clusters keep growing
Optics become cheaper than copper
If it happens: Broadcom earns $32B a year from 2030, worth $228B then at 20x profit. Weighted by a 35% chance and discounted to today: $53B.
Custom chips for every big AI lab
Many more companies pay Broadcom to design their own AI chips instead of buying NVIDIA.
Fact Firm orders reached $179.2B, including a long-term custom accelerator contract signed in 2026.
What would have to be true:
Custom chips stay cheaper than GPUs
Labs keep spending on AI
If it happens: Broadcom earns $100B a year from 2030, worth $711B then at 20x profit. Weighted by a 25% chance and discounted to today: $119B.
Chips for satellite internet
Radio and modem chips for direct-to-phone satellite networks and satellite broadband.
Fact Broadcom already makes Wi-Fi and radio chips for Apple's iPhones.
What would have to be true:
Satellite-to-phone becomes common
Operators buy rather than design chips
If it happens: Broadcom earns $12B a year from 2031, worth $66B then at 20x profit. Weighted by a 25% chance and discounted to today: $10B.
Switch on the moonshots you believe in to add their value to your model above.
Value today = chance x (market x share) x margin x (1 - tax) x 20x profit, discounted from the start year at your required return and shrunk for dilution. Margins are our view: Light instead of copper inside AI clusters 45%, Custom chips for every big AI lab 45%, Chips for satellite internet 35%.
Custom AI chips and networking for Google, Meta and other AI giants, plus VMware and other infrastructure software. Below is a valuation lab built on its latest SEC filings. It opens on what today's price implies; pick another scenario or move the sliders, and the Stonkometer compares today's price with your numbers. Assumption Our middle case puts Broadcom at $2.01T against a market value of $1.65T. It is a starting point, not a forecast; yours will differ, and that is the point.
Fact from filings or reports, sourced below · Assumption a Stonkometer default you can change · Our view opinion
Big claims, checked
Fact Each claim is quoted with its source. The maths shows what would have to be true; the slider defaults are assumptions.
Hock Tan, Broadcom CEO (Sep 2026)
“AI semiconductor revenue of $21.7 billion next quarter, up 236%.”
Up from $16.7B the quarter before.
Broadcom 10-Q (Aug 2026)
“$179.2 billion of firmly committed customer orders.”
Two years of revenue at the last 12 months' pace; about a quarter of it is due within 12 months.
Broadcom 8-K (Oct 2026)
“Up to $43 billion of residual value support for AI racks leased to a customer.”
If the customer defaults, Broadcom covers the gap between 72.5% of what is owed on the lease and what the racks sell for.
Who owns it, who controls it
Fact One class of common stock: one vote per share.
Economic interest
81%
Vanguard 9.9%
BlackRock 7.3%
Henry Samueli 1.8%
Other shareholders 81%
Shareholder votes
81%
Vanguard 9.9%
BlackRock 7.3%
Henry Samueli 1.8%
Other shareholders 81%
Who picks the board
all
All shareholders, one share one vote all
No one controls Broadcom. Chair Henry Samueli, a co-founder of the original Broadcom, is the largest individual holder.
Hock Tan has been CEO since 2006, when the company was still Avago.
What Broadcom owes, what it holds, and the spending it has already signed up for. Contracts for compute and infrastructure are not debt on the balance sheet, but they must be paid like it.
Cash and investments$24.0B2 Aug 2026
Debt$59.4Bincluding finance leases
Net debt$35.4Bcash minus debt
Spending commitments$131Bpurchase commitments $126.8B, mostly chips and components for 2027 and 2028, plus $3.9B of other commitments
Commitments / revenue1.5xrevenue, last 12 months: $89.1B
Most of the debt comes from buying VMware in 2023; it fell from $65.1B to $59.4B this fiscal year.
In October 2026 Broadcom agreed to cover up to $43B if a customer defaults on leases for AI racks built on its chips.
Customers have firmly committed $179.2B of orders, which more than covers the purchase commitments.
Revenue was $29.6B in the quarter to 2 August 2026, up 86%. Semiconductors were $20.8B (AI $16.7B, up 221%) and infrastructure software $8.8B (up 29%).
GAAP operating income was $16.0B; before stock pay and amortisation of acquired intangibles it was $20.1B, 68% of revenue.
Broadcom guides $34.8B of revenue for the quarter to 1 November 2026, with $21.7B from AI chips.
Firm customer orders not yet delivered total $179.2B, including a long-term contract for custom AI accelerators signed in the second quarter; about 25% should become revenue within 12 months.
Its top five customers bought about 55% of everything it sold in the quarter; one distributor alone accounted for 50%.
In October 2026 it agreed to provide up to $43B of residual value support on AI racks leased to a customer.
Key risks Fact
A handful of AI customers buy most of the chips; if one designs its own or switches supplier, revenue falls fast.
Purchase commitments of $126.8B, mostly for 2027 and 2028, have to be paid even if orders slow.
The $43B rack backstop ties Broadcom to one customer's ability to pay its leases.
VMware price rises have angered some customers, who may move away.
Chips are made by TSMC, mostly in Taiwan.
The company's own risk factors, summarised in plain English. Read the originals below.
The business lines in the model
AI chips (custom accelerators and networking)$42B last 12 months (to 2 aug 2026), $67B on the latest basis
$16.7B in Q3 FY26, up 221% (and 54% on the quarter): custom AI chips (XPUs) and Ethernet AI switches. Margin is our estimate; semiconductors earned 61% before stock pay.
Other chips (broadband, wireless, storage)$17B last 12 months (to 2 aug 2026), $17B on the latest basis
Non-AI semiconductors, about $4.1B in Q3 FY26: Wi-Fi, broadband, storage and phone radio chips.
Infrastructure software (VMware)$30B last 12 months (to 2 aug 2026), $35B on the latest basis
$8.8B in Q3 FY26, up 29%, led by VMware Cloud Foundation. 83.7% segment margin before stock pay.
Bet: Optical links for AI (co-packaged optics)
Switches with lasers built into the chip package, linking ever larger AI clusters.
Bet: Custom AI chips for phones and PCs
Bringing its custom-chip business to devices that run AI locally.
Last 12 months (to 2 Aug 2026): Q4 FY25 to Q3 FY26 from the earnings releases; AI revenue as stated by the CEO each quarter. Latest quarter x 4 (Q3 FY26): Quarter to 2 Aug 2026 x 4. Broadcom guides $34.8B for the next quarter, with $21.7B from AI. Cash $24.0B, less $59.4B of debt (2 Aug 2026). 4,774M shares outstanding on 28 Aug 2026 (10-Q cover).
Questions people ask Fact
Is Broadcom stock overvalued?
At $345.00 a share Broadcom is worth about $1.65T, around 43 times its last 12 months of profit. Whether that is fair depends on how long its AI chip sales keep growing; the lab shows what has to happen.
How does Broadcom make money?
From chips and software. AI chips and networking for a few large customers were $16.7B of $29.6B in the quarter to August 2026; VMware and other software added $8.8B.
Why is customer concentration a risk for Broadcom?
Its top five customers were 55% of revenue in the latest quarter. If one of them designs its own chips or cuts spending, sales could fall fast; the lab lets you add an extra return for that.
Not investment advice. Stonkometer is an educational calculator, not investment advice. Valuations depend entirely on the assumptions you choose. We are not a broker or adviser, and nothing here is a recommendation to buy or sell any security. Do your own research and consider a licensed adviser. Full disclaimer