Signal Ledger LabSignal Ledger valuation · AVGO
Broadcom Inc.
What the shares are worth today on our research (management’s own targets for each business): every line valued at the end of FY2030, net debt rolled forward, then discounted back to Aug 2, 2026.
- Business value at FY2030
- $2,905B
- FY2030 revenue
- $367B
- FY2030 EPS · P/E
- $34.65 · 20×
- Discount rate (WACC · equity)
- 9.67% · 9.87%
Latest quarter in this research: Q3 FY2026
Reported Sep 2, 2026 for the quarter to Aug 2, 2026 (company release ↗). This valuation already reflects these results (researched Oct 23, 2026).
| Segment | Revenue | vs a year ago | Operating income | Margin |
|---|---|---|---|---|
| Semiconductor solutions | $20.8B | +127% | — | — |
| Infrastructure software | $8.75B | +29% | — | — |
- AI semiconductor revenue $16.7B, up 221%; Q4 AI guidance $21.7B.
- Q4 company revenue guidance $34.8B and non-GAAP operating margin about 66%; adjusted margin is not GAAP EBIT.
- AI and non-AI operating profit are not separately disclosed; segment costs exclude unallocated corporate items.
What each business is worth
| Business | Model | FY2030 revenue | Value today | Per share | 2030 multiple | Value from beyond FY2030 |
|---|---|---|---|---|---|---|
| AI semiconductors | Margin | $304B | $2,495B | $522.59 | 16.8× EBIT | 66% |
| Non-AI semiconductors | Margin | $16B | $89B | $18.57 | 10.1× EBIT | 51% |
| Infrastructure software | Margin | $47B | $440B | $92.18 | 13.3× EBIT | 59% |
| Company costsHead-office costs no segment carries, valued as one negative business | Cost line | — | −$675B | −$141.34 | — | 65% |
| All businesses | $367B | $2,349B | $492.01 |
From 2030 back to today
- Enterprise value at end of FY2030$2,905B
- Plus net cash at FY2030$410B
- Equity value at FY2030$3,315B
- ÷ (1 + 9.87%)^4.2 years at the cost of equity$2,223B
- + dividends paid on the way, discounted$43B
This reconciliation checks the published Signal Ledger valuation against the net-debt path. The difference is 2.0%, inside our 5% tolerance.
From businesses to one share
- All businesses, valued today$2,349B
- − borrowings$59B
- − finance leases$0B
- + cash and short-term investments$24B
- ÷ diluted shares4.774B
- Signal Ledger valuation$484.59
Year by year to FY2030
| Fiscal year | Revenue | EBITDA | Capex | Free cash flow | Net debt at year end |
|---|---|---|---|---|---|
| FY2026 | $106B | $53B | $1.1B | $44B | $28B |
| FY2027 | $167B | $83B | $1.7B | $68B | $27B cash |
| FY2028 | $286B | $140B | $2.9B | $116B | $131B cash |
| FY2029 | $324B | $162B | $3.2B | $133B | $257B cash |
| FY2030 | $367B | $187B | $3.7B | $154B | $410B cash |
What must be true
- AI semiconductors grows revenue from $58.0B in FY2026 to $304.2B in FY2030 (5.2×).
- Non-AI semiconductors holds revenue roughly flat, from $16.5B in FY2026 to $15.7B in FY2030.
- Infrastructure software grows revenue from $31.4B in FY2026 to $47.4B in FY2030 (1.5×).
- AI semiconductors raises its EBIT margin from 57.6% to 61.6%.
- Non-AI semiconductors holds its EBIT margin at 57.6%.
- Infrastructure software raises its EBIT margin from 76.8% to 80.8%.
- The company spends $12.5B of capital expenditure through FY2030.
- Net debt peaks at $35.4B in FY2025 and stays financeable.
What the price implies
At our discount rate, the price assumes less than our research overall: one combination matching $323.24 is about $239.6B of FY2030 sales (growth of about 22.6% a year from FY2026) with 63.9% GAAP EBIT margin — versus $367.3B and 63.9% GAAP EBIT margin in our research.
At the research price of $323.24 (2026-10-23), the price asks less than our assumptions overall. These are operating requirements at that price, not additional valuations or forecasts.
If sales and margins changed together
Each row matches the same research price at our unchanged discount rate, by scaling every operating line's margin by one common factor. Sales cover margin and capacity lines only; other valuation lines stay fixed. Margins are revenue-weighted within each metric, before separately modeled corporate costs and eliminations. The conclusion uses the row at our research margins when sales alone can match the price, otherwise the solved row needing the least sales growth; this is a trade-off between growth and profitability, not a forecast.
| FY2030 sales factor | FY2030 sales | FY2026–30 CAGR | Required FY2030 margin | Requirement |
|---|---|---|---|---|
| 0.65×At research margins | $239.6B | 22.6% | 63.9% GAAP EBIT | Within margin guardrails |
| 1.50× | $550.9B | 51.0% | 37.0% GAAP EBIT | Within margin guardrails |
| 2.00× | $734.6B | 62.3% | 31.5% GAAP EBIT | Within margin guardrails |
| 3.00× | $1,101.9B | 79.6% | 25.9% GAAP EBIT | Within margin guardrails |
CAGR uses $105.9B of same-scope FY2026 sales from the published model or its sourced research base, over four fiscal years. “Within margin guardrails” checks numeric limits only, not commercial plausibility. Each line and year must stay at or below 50.0% GAAP EBIT and 100% EBITDA, or our research margin where that is higher; capacity EBIT uses the engine's equipment depreciation. Unsolved margins are not extrapolated.
- Implied discount rate
- 12.7%
- All-business FY2030 sales factor
- 0.65×
The WACC that makes model value equal the price, shifting WACC and cost of equity by the same amount. Model: 9.7% WACC · 9.9% cost of equity.
FY2030 revenue would need to reach $239.6B (model: $367.3B) across the margin and capacity businesses. FY1 stays fixed; the sales change ramps to FY2030 and stays at that factor thereafter.
If only one business changed
Businesses with margin or capacity revenue paths, ordered by value today. Revenue and margin are separate alternatives; these requirements are not added together.
AI semiconductors
- Revenue alone
- FY2030 revenue would need to reach $182.3B (model: $304.2B).
- Margin alone
FY2030 EBIT margin would need to reach 42.6% (model: 61.6%).
Infrastructure software
- Revenue alone
- This business alone cannot get there within the search range.
- Margin alone
- This business alone cannot get there within the search range.
Non-AI semiconductors
- Revenue alone
- This business alone cannot get there within the search range.
- Margin alone
- This business alone cannot get there within the search range.
Mechanical requirements, not forecasts. The separate sales-only and single-business factors are searched from 0.1× to 6×; an unsolved comparison means this business alone cannot get there within those bounds. Single-business revenue changes apply from FY2 onward; margin changes scale the full EBIT or EBITDA margin path. Mixed groups show revenue-weighted EBIT and EBITDA margins separately. Requirements above 100% are not feasible margins. Joint rows instead search non-negative uniform margin factors only up to the EBIT/EBITDA guardrails; the entire margin path scales, including post-FY2030 convergence. Sales and margins change together only in that table. The rate search runs from the largest terminal growth rate plus 0.5 percentage points to 30% WACC.
The discount rate
- Cost of equity
- 9.87%
- WACC
- 9.67%
- 10-year Treasury · model / spot
- 3.87% · 5.13%
r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 1.20 after Blume adjustment × 5%, rounded to 0.01% (1bp)
methodology §4.5: market-weighted WACC, not rounded
The model uses the recorded 5-year average Treasury yield. The spot yield is shown for context.
Every input, with its source
Show 25 inputs · reported, guidance and rule-based
| Input | Value | Basis | Why |
|---|---|---|---|
| Revenue FY2026AI semiconductors | $58.0B | Guidance | target (methodology §4.2), growth 187.1% Q3 FY2026 earnings call 2026-09-02: about $115B of AI revenue in FY2027 (supply secured) and line of sight to about $230B in FY2028 |
| Revenue FY2030AI semiconductors | $304.2B | Guidance | fade high growth (methodology §4.2), growth 15.0% Q3 FY2026 earnings call 2026-09-02: about $115B of AI revenue in FY2027 (supply secured) and line of sight to about $230B in FY2028 |
| EBIT margin FY2030AI semiconductors | 61.6% | Rule | linear path to 61.6% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 72.0% to FY2030; no cited expansion evidence) Valuation methodology §4.3 · Read methodology ↗ |
| Maintenance capexAI semiconductors | 1.0% | Reported | fabless companyAnnual FY2025: capex $0.623B ÷ revenue $63.9B |
| Terminal growthAI semiconductors | 3.0% | Rule | methodology §4.2 terminal growth for a growth line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2026Non-AI semiconductors | $16.5B | Guidance | hold decline (methodology §4.2), growth -1.2% Q3 FY2026 release and call: Q4 semiconductor revenue ~$26.1B incl. AI $21.7B (non-AI ~$4.3B) |
| Revenue FY2030Non-AI semiconductors | $15.7B | Guidance | hold decline (methodology §4.2), growth -1.2% Q3 FY2026 release and call: Q4 semiconductor revenue ~$26.1B incl. AI $21.7B (non-AI ~$4.3B) |
| EBIT margin FY2030Non-AI semiconductors | 57.6% | Rule | linear path to 57.6% by FY2030 (§4.3 E2: 0.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR -1.2% to FY2030; no cited expansion evidence) Valuation methodology §4.3 · Read methodology ↗ |
| Maintenance capexNon-AI semiconductors | 1.0% | Reported | fabless companyAnnual FY2025 |
| Terminal growthNon-AI semiconductors | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2026Infrastructure software | $31.4B | Guidance | fade high growth (methodology §4.2), growth 16.3% Q3 FY2026 call: Q4 infrastructure software revenue ~$8.7B |
| Revenue FY2030Infrastructure software | $47.4B | Guidance | fade high growth (methodology §4.2), growth 8.4% Q3 FY2026 call: Q4 infrastructure software revenue ~$8.7B |
| EBIT margin FY2030Infrastructure software | 80.8% | Rule | linear path to 80.8% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 11.9% to FY2030; no cited expansion evidence) Valuation methodology §4.3 · Read methodology ↗ |
| Maintenance capexInfrastructure software | 1.0% | Reported | company share companyAnnual FY2025 |
| Terminal growthInfrastructure software | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Share of revenue FY2026Company costs | 13.9% | Reported | company costs outside segment profit, cash only: rule 17: unallocated expenses mix non-cash amortization of acquired intangibles (VMware); cash costs incl. stock compensation ≈ $8.9B over four quarters ÷ trailing revenue $89.1B; grows with the lines' revenue Q3 FY2026 release: stock-based compensation $2,019M, restructuring $115M, amortization of acquisition intangibles $2,006M in the quarter |
| Share of revenue FY2034Company costs | 13.9% | Reported | company costs outside segment profit, cash only: rule 17: unallocated expenses mix non-cash amortization of acquired intangibles (VMware); cash costs incl. stock compensation ≈ $8.9B over four quarters ÷ trailing revenue $89.1B; grows with the lines' revenue Q3 FY2026 release: stock-based compensation $2,019M, restructuring $115M, amortization of acquisition intangibles $2,006M in the quarter |
| WACCDiscount rates | 9.67% | Rule | methodology §4.5: market-weighted WACC, not rounded FRED DGS10 2021-10-20..2026-10-21 |
| Cost of equityDiscount rates | 9.87% | Rule | r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 1.20 after Blume adjustment × 5%, rounded to 0.01% (1bp) 60 monthly returns vs SPY, 2021-09..2026-09 (adjusted closes) |
| Tax rateDiscount rates | 16.0% | Guidance | management guidance Q3 FY2026 earnings call: non-GAAP tax rate about 16% for Q4 and FY2026 |
| Cash and short-term investmentsBalance sheet | $24.0B | Reported | cash, cash equivalents and short-term investments us-gaap:CashAndCashEquivalentsAtCarryingValue · 0001730168-26-000080 (filed 2026-09-10) |
| BorrowingsBalance sheet | $59.4B | Reported | borrowings due within a year plus long-term borrowings us-gaap:DebtCurrent · 0001730168-26-000080 + us-gaap:LongTermDebtAndCapitalLeaseObligations · 0001730168-26-000080 |
| Finance leasesBalance sheet | $0.0B | Reported | finance leases not separately tagged; retained inside combined debt, with no additional lease deduction balance sheet 2026-08-02 |
| SharesBalance sheet | 4.774B | Reported | shares outstanding as of 2026-08-28 cover page of 10-Q 0001730168-26-000080 |
| Dividends per yearShareholders | $12.4B | Reported | last four quarters at $0.65 × 4.774B shares Q3 FY2026 release: quarterly dividend $0.65 per share |
Research notes
- share-count comparison: 4.887B quarter 2026-05-04..2026-08-02 · 0001730168-26-000080; point-in-time denominator retained
- unallocated company costs: $8.9B a year (10.0% of trailing revenue), growing with the lines, valued as one negative business
- cost of equity 9.87% (β 1.20 after Blume adjustment), WACC 9.7%
- Non-AI semiconductors: FY2030 margin set to 57.6% instead of 61.6% (§4.3 E2: 0.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR -1.2% to FY2030; no cited expansion evidence)
Signal Ledger research under one stated scenario — management's targets are delivered — not a forecast that they will be and not investment advice. The research desk (Claude Opus 5.5) gathers filings, guidance and targets; deterministic code applies the samepublished rules to every company and checks the result. Inputs may contain errors; follow the source links before relying on them. Read our valuation methodology →