AVGO
Broadcom
Hybrid Industrial
★ Quality 76/100Price today
$385.00
what the market pays
Worth
$172.00
calculated cycle value
Price is 124% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Manufacturing + technology
$181.68
per share
How it's calculated
Anchor EV/EBITDA 20x blended (semis+VMware software). EBITDAps $9.09. Custom AI XPU duopoly (Google TPU, Meta MTIA). AI semis $18B (+74%), $8.2B Q1 FY2026 (2x YoY). FCF $26.9B (+39%). ND $45.8B (1.7x FCF — VMware $69B). Div $2.60 (15th cons. year). Market PEG 0.64 (non-GAAP). BARGAIN <$138, ATTRACTION <$155.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Hybrid Industrial · vs 28 peers
You pay 69.4x times this business's cash flow; its sector median is 33.7x.
54% above what Charlie thinks it's worth (31.9x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $5.69/share × 20.0x multiplier minus $9.68 in negative net cash = $172.00 in intrinsic value. Today's price of $385.00 is 55% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 124% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $163.40.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$137.60
-20% off Value
🟡 Discounted
≤$163.40
-5% off Value
🔴 Today
$385.00
-55% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
Broadcom forges the custom silicon for Google and Meta.
Broadcom designs custom semiconductors (ASICs/XPU) for hyperscalers and sells networking infrastructure, plus enterprise software after swallowing VMware. It charges for high-margin chips and, now, for recurring software licenses. Revenue FY2025 $63.9B, GM 68%, FCF $26.9B.
In AI XPUs they form an effective duopoly: they design the silicon for Google's TPUs and Meta's MTIA, contracts that take years to migrate away from. In networking they dominate datacenter switching. The moat is real but it's not an eternal toll booth: it depends on a few giant customers and on keeping winning each design.
Revenue history
From $27.5B to $63.9B in 4 years — nearly 2.3x its size. Selling more and more is the base of everything else.
Catalysts and risks
AI semis $8.2B in Q1 FY2026, double year-over-year; segment running at ~$18B annualized (+74%).
VMware integration migrating to subscription: pushes software margin toward the 70s and deleverages the $69B debt.
15th consecutive year raising the dividend ($2.60); FCF +39% gives ammunition to keep going.
Brutal customer concentration: if Google or Meta bring it in-house or switch suppliers, the AI growth deflates.
Net debt of $45.8B (1.7x FCF) from VMware; an operating stumble squeezes harder than it looks.
Reported net income $0.0B: merger amortization and charges distort GAAP; the case depends on normalized FCF, not the headline.
Charlie's note
“Hock Tan is a ruthless capital allocator, and here that's a compliment. The business is magnificent; the price at 20x already discounts much of the AI optimism, so only pay when the market has a bad day.”
Analysis · June 2026
So when would be a good price for Broadcom?
By our calculation, not yet. We will email you the day it drops to $163.40 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.