AVGO Analysis: Broadcom's $27 Billion Cash Machine Faces Its Biggest Q1 Test as AI Revenue Expectations Hit Fever Pitch
Broadcom Inc. (NASDAQ: AVGO) reports fiscal Q1 2026 earnings on March 4, and the stakes have never been higher. Trading at $319.55 with a $1.52 trillion market cap, the chipmaker sits 23% below its 52-week high of $414.61 after a pullback that has investors debating whether this is a buying opportunity or the start of a valuation correction. The numbers from fiscal 2025 were extraordinary — $63.9 billion in revenue, $26.9 billion in free cash flow, and a gross margin that held steady near 68% even as the company digested the massive VMware acquisition. But with shares trading at 67x trailing earnings, the market is pricing in continued AI-driven hypergrowth. March 4's report will reveal whether Broadcom's custom silicon business is delivering on those expectations, or whether the AI infrastructure buildout is beginning to slow. What makes this earnings particularly significant is the company's positioning at the intersection of two mega-trends: the hyperscaler AI infrastructure arms race and enterprise software consolidation through VMware. Broadcom needs both engines firing to justify its current premium.