The tech sell-off has shaken many stocks, but it’s also opened rare doors for savvy investors. One of those doors has Broadcom (AVGO) behind it. After a hot run in 2024, the chip giant lost steam in early 2025, dropping about 25% from its peak and now trading around 20% lower year to date.
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But don’t let the dip fool you. Broadcom isn’t broken. In fact, this might be a gift.
If you wish to read more extensively about Broadcom, I recommend what our analyst at Tipranks, Michael Byrne, had to say about it right here.
A Proven Winner Over Time
Broadcom’s long-term track record is tough to match. Over the last five years, the stock has soared over 780%. That means a $10,000 buy in 2019 would now be worth over $88,000. Stretch it back to ten years, and the return jumps to 1,744%. That same $10,000 would now sit at a wild $174,400.
Sure, there have been drops along the way. But those who held on – or bought more – have been well paid for their faith.
Riding the AI Wave
Broadcom isn’t just riding past wins. It’s playing a key part in the AI boom. Big names like Amazon (AMZN), Google (GOOGL), and Microsoft (MSFT) are pouring cash into new data tools. Broadcom builds the chips and parts these firms need to grow. In its most recent quarter, Broadcom saw revenue jump 25% year-over-year and posted a 41% leap in adjusted profit.
CEO Hock Tan says AI demand isn’t slowing down. He expects $4.4 billion in AI chip sales ‘next quarter alone.’ That’s strong proof this story still has fuel.
Valued Just Right
After the drop, AVGO trades at 29 times forward earnings. That’s not dirt cheap, but it’s fair for a top chip name in a high-growth field. And if you look out to 2026, it drops under 25 times. That small premium makes sense with the S&P 500 (SPY) sitting near 20x.
Quiet Dividend Strength
Not many tech stocks boost payouts each year, but Broadcom does. It’s raised its dividend for 14 straight years. Over the past five, the payout has grown at a 13.6% yearly clip. And with a payout ratio of just 41.7%, there’s room for more.
What Is the Price Target for AVGO Stock?
Turning to Wall Street, Broadcom is considered a Strong Buy, based on 24 ratings. The average price target for AVGO stock is $252.20, implying a 44.66% upside potential.
The Bottom Line
Broadcom checks all the boxes — growth, income, and fair value. It leads in AI, pays a rising dividend, and has proven it can grow. The current pullback may not last long. For those who missed the last run, this dip could be the best shot to get in.