After Outperforming Every "Magnificent Seven" Stock in 2025, Is Broadcom Still a Buy for 2026?

• Broadcom conscionable delivered different grounds twelvemonth of blowout results.

• Broadcom expects AI semiconductor gross to treble twelvemonth implicit twelvemonth successful its upcoming quarter.

• The valuation has gone from pricey to precise expensive.

• 10 stocks we similar amended than Broadcom ›

The unit was connected Broadcom (NASDAQ: AVGO) to present blowout fourth-quarter and full-year fiscal 2025 results connected Dec. 11. And it didn't disappoint.

Full-year gross was up 24%, diluted net per stock soared a mind-numbing 288%, and escaped currency travel (FCF) popped 39%. Broadcom is doing a phenomenal occupation of converting income into high-margin maturation and managing its spending truthful that it doesn't interaction its FCF.

But the marketplace cares much astir wherever a institution is going than wherever it has been. And Broadcom is up immense successful 2025, outperforming each "Magnificent Seven" banal -- Nvidia (NASDAQ: NVDA), Apple, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Microsoft, Amazon, Meta Platforms, and Tesla.

Over the past 3 years, Broadcom's banal terms has skyrocketed implicit seven-fold. Broadcom is present the sixth-most invaluable U.S. institution and is wrong striking region of surpassing $2 trillion successful marketplace capitalization.

With specified a accelerated run-up successful the banal successful a comparatively abbreviated magnitude of time, immoderate investors whitethorn beryllium wondering if Broadcom is overvalued oregon inactive has country to run.

Here's however investors should beryllium reasoning astir Broadcom successful December, and if the artificial quality (AI) maturation banal is simply a bargain for the caller year.

AI has transformed Broadcom's gross mix, making it a bulk semiconductor solutions concern (AI, AI networking, broadband, industrial, networking and wide connectivity, server and storage, wireless) alternatively than infrastructure bundle (cybersecurity, endeavor software, fibre transmission networking, mainframe software, and backstage cloud).

In fiscal 2025, 58% of Broadcom's gross came from semiconductor solutions. AI semiconductor gross accrued 74% twelvemonth implicit twelvemonth successful Broadcom's latest quarter. For first-quarter fiscal 2026, Broadcom is forecasting $8.2 cardinal successful AI semiconductor revenue, which is doubly arsenic overmuch arsenic the archetypal 4th of 2025.

Based connected a full gross forecast of $19.1 billion, Broadcom's AI semiconductor gross is expected to marque up 42.9% of full gross acknowledgment to increasing request for Broadcom's customized AI chips, called XPUs, and its associated hardware, similar Jericho routers and Tomahawk switches. For context, Broadcom generated $12.2 cardinal successful AI gross for the entirety of fiscal 2024.