Broadcom shareholders have plenty to cheer about, and they made that clear at the company’s annual meeting on April 20. All eight directors were re-elected, the executive compensation package sailed through without opposition, and PricewaterhouseCoopers was confirmed as the independent auditor for the current fiscal year. The harmony reflects a simple reality: the stock has more than doubled over the past twelve months, surging 116 percent to hit a fresh all-time high of €360.45 before closing the week at €356.80.
The catalyst behind the rally is unmistakable. Broadcom’s custom AI chip business is booming, and a landmark partnership with Meta underscores just how deep the demand runs. The two companies have formalized a multi-year strategic collaboration running through 2029, under which Broadcom will develop what is described as the world’s first AI accelerator built on 2-nanometer manufacturing technology. The initial phase covers more than one gigawatt of computing power, with the agreement structured as a long-term, multi-stage expansion. CEO Hock Tan, who stepped down from Meta’s board on the day of the announcement, will remain in an advisory role focused on Meta’s chip roadmap.
The Meta deal adds to an already impressive growth trajectory. Broadcom’s AI chip revenue hit $8.4 billion in the first fiscal quarter of 2026, a 106 percent jump from a year earlier. Management is guiding for total second-quarter revenue of roughly $22 billion, with the AI segment expected to contribute about $10.7 billion. Tan has set an ambitious long-term target, forecasting that the custom AI chip business could generate $100 billion or more in annual revenue by 2027. The company’s adjusted EBITDA margin has already climbed to 68 percent.
Not every headline this week was positive. Reports that Google has held talks with Marvell Technology about new AI chips briefly weighed on Broadcom’s shares, sending Marvell stock up more than four percent. Most analysts, however, viewed the development as a routine diversification move by a major cloud customer rather than a sign that Google is walking away from Broadcom. The two companies extended their partnership through 2031 just this month. Still, the episode highlights a growing reality: hyperscale cloud providers are increasingly spreading their chip orders across multiple suppliers to reduce dependency, raising competitive pressure for all established players.
Should investors sell immediately? Or is it worth buying Broadcom?
That pressure is reflected in the valuation debate swirling around Broadcom. The stock trades at a price-to-earnings ratio above 100, a level that demands continued execution. Analysts at Simply Wall St give the current valuation a score of zero out of six. Fair-value estimates range wildly from roughly $259 to $588 per share. Twenty-nine analysts maintain a consensus buy rating with an average price target of $443, but the wide dispersion suggests genuine uncertainty about where the stock goes from here.
Technical indicators add to the caution. The share price sits about 22 percent above its 50-day moving average, and the Relative Strength Index is approaching 68, edging toward overbought territory. After a 29 percent monthly gain, a pullback would surprise few market observers.
Kiley Juergens Wealth Management trimmed its Broadcom position slightly in the fourth quarter, though the stock still represents four percent of the firm’s overall portfolio — a core holding by any measure. Critics point to the company’s heavy reliance on a small number of large AI customers and intensifying competition from Nvidia, AMD, and now Marvell. Weakness in Broadcom’s non-AI businesses could also weigh on future earnings growth.
The next major test arrives with the second-quarter earnings report. If Broadcom delivers on its $22 billion revenue target and the $10.7 billion AI segment goal, skeptics may quiet down for now. A miss in the traditional business lines, however, would put the stretched valuation squarely back in the spotlight.
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