Broadcom (AVGO) Stock: The Real Data Driving Its Surge & How It Compares

Broadcom's AI Hype Train: Don't Believe It (Yet)

Alright, let's talk Broadcom (AVGO). The narrative swirling around this semiconductor giant is thick with AI potential, fueled by projections of massive hyperscaler capital expenditure (CapEx) increases. CreditSights, now part of Fitch, is throwing around numbers like $602 billion in total CapEx by 2026, with a whopping 75% earmarked for AI. Sounds impressive, right?

Digging Into the Hyperscaler Hype

Here's where my skepticism kicks in. That 75% figure—$450 billion dedicated to AI—is based on projections. Evelyn Advisors, another firm, estimates $365 billion in total CapEx by 2025, which translates to $274 billion for AI (again, assuming that 75% allocation). If the CreditSights number holds, we're looking at a 64% growth rate in AI-specific CapEx. A big jump. But how solid are these projections? And more importantly, how much of that pie does Broadcom realistically get?

Broadcom itself is playing coy. CEO Hock Tan resisted updating the company's AI Serviceable Addressable Market (SAM) estimate, currently between $60 billion and $90 billion, during the Q2 2025 earnings call. He cited a lack of "better visibility," hinting that a potential update might come in 2026. The market, predictably, loves this kind of forward-looking ambiguity. When Broadcom initially announced its current AI SAM, the stock jumped over 24%.

The OpenAI deal is the latest spark. But even with this, the visibility Tan mentioned might not be there until Alphabet (Broadcom's biggest hyperscaler customer, supposedly) releases its Q4 2025 results, including 2026 CapEx estimates. Those numbers usually drop in late January or early February. Broadcom's Q1 2026 results, in turn, arrive in early March.

The NVDA and AVGO Comparison: A Grain of Salt

Now, let’s address the relative strength argument. Yes, Broadcom's recent 10% dip is less severe than the iShares Semiconductor ETF (SOXX) and NVIDIA’s (NVDA) 13% drop since October 29th. But comparing Broadcom to NVDA is like comparing a diversified index fund to a hyper-growth stock. NVDA's valuation is built on current AI dominance, while Broadcom's is banking on future infrastructure spending. The risk profiles are vastly different.

Broadcom's shareholder returns are undeniably impressive. A 57% compound annual growth rate (CAGR) over the last five years and a total shareholder return of 848% tells a compelling story. (That TSR figure includes reinvested dividends, which is crucial.) And a 108% total shareholder return in the last twelve months suggests recent acceleration. But past performance doesn't guarantee future results, especially when the future hinges on projected AI spending. Broadcom (NASDAQ:AVGO) shareholders have earned a 57% CAGR over the last five years

I've noticed something else in the online chatter surrounding Broadcom. There's a palpable sense of FOMO (fear of missing out) driving some of the bullish sentiment. People see the NVDA rocket ship and assume AVGO is next in line. But that's not how the semiconductor industry works. It's a complex web of specialized players, each with unique strengths and weaknesses.

The MarketBeat "Better Buys" List: A Contrarian Signal?

MarketBeat, in a move that’s either insightful or clickbait-y, points out that Broadcom wasn't on their list of "five stocks that top analysts are quietly whispering to their clients to buy now." While Broadcom has a "Buy" rating, these analysts supposedly see better opportunities elsewhere. This is the part of the report that I find genuinely puzzling because it goes against the prevailing narrative. It’s not necessarily a reason to panic, but it's worth a closer look. Broadcom’s Best Catalyst Yet Might Be Hiding in 2026 Forecasts

The launch of Gemini 3, Alphabet's latest AI model, is being touted as a boon for Broadcom because the company helps produce Alphabet's custom-designed tensor processing units (TPUs). Salesforce CEO Marc Benioff's glowing review of Gemini 3 on X (formerly Twitter) only adds fuel to the fire. But let's be clear: Benioff is a salesman (a very successful one), and his enthusiasm should be taken with a hefty grain of salt.

Show Me the Real AI Money

Broadcom is a solid company with a history of strong performance. But the current AI hype feels premature. The 2026 projections are just that: projections. And while the company's potential is undeniable, its stock price already reflects a significant amount of future growth. Show me the concrete AI revenue, and then we can talk.

Overpriced Optimism

Broadcom's success isn't guaranteed. It's riding a wave of projected spending.