Current Price
$382.07
PE Ratio (TTM)
61.9x
Intrinsic Value
$517.84
+26.2% margin of safety
What Is Broadcom Inc.'s Fair Value?
As of 2026-06-12, applying a 50.0x earnings multiple to Broadcom Inc.'s (AVGO) earnings per share of $6.18 yields a fair value estimate of $517.84 per share, versus a market price of $382.07.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $450.94 to $592.28. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How our PE model works · Recalculate in PE mode · AVGO intrinsic value (DCF view)
Is Broadcom Inc. (AVGO) Overvalued?
At $382.07, AVGO trades about 26.2% below its PE-based fair value estimate, a modest discount to its earnings power, though not enough for us to call it cheap outright.
COMPETITIVE MOAT
↑AI Accelerator Competition
Broadcom's AI accelerators are gaining traction as a viable alternative to Nvidia's dominant offerings. This competition diversifies customer options and strengthens Broadcom's position in the high-growth AI market.
↑Diversified Product Portfolio
The company's broad range of semiconductor solutions across networking, broadband, and mainframe software creates sticky customer relationships. This diversification reduces reliance on any single product cycle.
↑Strategic Acquisitions
Broadcom has a history of successful acquisitions that integrate complementary technologies and expand market reach. This strategy enhances its competitive capabilities and revenue streams.
INVESTMENT RISKS
↓AI Guidance Disappointment
Failure to raise AI sales guidance in earnings reports can lead to investor disappointment and stock price volatility. This signals potential headwinds in market expectations.
↓Intense Semiconductor Competition
The semiconductor industry is highly competitive, with rapid technological advancements. Competitors can quickly erode market share if Broadcom fails to innovate consistently.
↓Cyclical Industry Dependence
The semiconductor market is inherently cyclical, subject to fluctuations in demand and inventory levels. Economic downturns can significantly impact revenue and profitability.
Base case
AVGO base case PE valuation
Intrinsic Value
$517.84
Margin of safety
+26.2%
Expected annual return
+6.3%
Base case assumptions: 20.0% annual earnings growth, 50x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the AVGO PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Broadcom Inc. respond.
Open PE Calculator for AVGOCompany Overview
Broadcom Inc. is a prominent global technology enterprise focused on the innovation, development, and supply of advanced semiconductor solutions and critical infrastructure software. The company's headquarters are situated in San Jose, California, and it maintains a significant team of 19,000 full-time staff. Its operations are segmented into four primary divisions: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other. Broadcom’s diverse product range is integrated into numerous end-user technologies, including enterprise and data center networking, residential internet solutions, digital television receivers, telecommunications apparatus, mobile phones, data center servers and storage architectures, industrial automation, alternative and power generation systems, and electronic display technologies. The company's product offerings extend from fundamental discrete components to intricate sub-systems incorporating various device categories. This also encompasses specialized firmware designed to facilitate interaction between analog and digital systems, alongside mechanical hardware engineered to connect with optoelectronic or capacitive sensing technologies.
Financial Metrics — AVGO PE Stock Valuation Data
PE Ratio (TTM)
61.9x
PEG Ratio
0.49
Earnings Yield
1.62%
ROE (TTM)
36.4%
Revenue/Share (TTM)
$15.90
Dividend Yield
0.65%
Debt/Equity
0.74x
Frequently Asked Questions
What is the PE ratio of AVGO?
The trailing twelve-month PE ratio of AVGO reflects how much investors pay per dollar of Broadcom Inc.'s earnings. This metric is most useful when compared to Semiconductors peers and the company's own historical range.
Is AVGO overvalued based on PE ratio?
AVGO's PE of 61.9x combined with a PEG ratio of 0.49 provides a growth-adjusted perspective. A PEG below 1.0 suggests AVGO may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Semiconductors, a DCF analysis may be more appropriate.
How do I value AVGO stock using PE ratio?
To value Broadcom Inc. using PE: (1) Compare the current PE (61.9x) against the Semiconductors median to assess relative pricing, (2) check the PEG ratio (0.49) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of AVGO?
AVGO's PEG ratio is 0.49, calculated by dividing the PE ratio (61.9x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for AVGO stock valuation?
PE ratio gives a quick relative read — how AVGO is priced versus Semiconductors peers. DCF provides an absolute value based on projected free cash flows. For AVGO, with a strong ROE of 36.4%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See AVGO DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Technology valuationsP/E and DCF value AVGO with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.