AVGO: Triad Deal Masks a 70x Earnings Problem
Broadcom trades at $358.08 and a 69.8x trailing PE after securing the most significant custom AI silicon partnership in the industry's history. The stock sits 134% above its 52-week low of $153.09, 10% above both its 50-day and 200-day moving averages, and commands a $1.70 trillion market cap. The Triad deal with Alphabet and Anthropic provides revenue visibility through 2031 and cements Broadcom as the go-to partner for hyperscaler custom chips. None of that changes the math. At 70x earnings, Broadcom prices in flawless execution across six strategic AI customers, sustained 50%+ semiconductor revenue growth, and a smooth integration of the VMware acquisition that still weighs on the balance sheet. AI semiconductor revenue doubled to $8.4 billion in Q1 FY2026 — genuinely impressive — but the stock already reflects several years of that trajectory. Investors buying here are paying 2028 prices for 2026 earnings. The bull case requires every catalyst to land on schedule. The bear case only needs one to slip.