Broadcom

AI semiconductors ($16.7bn, +221%) are 56% of Q3 revenue and come from a few XPU customers; infrastructure software (VMware) grew 29% to $8.8bn. Q4 is guided at a 66% adjusted operating margin vs about 68% in Q3, so the margin falls as the AI share rises.

Stock-based pay of $2.0bn in Q3 (about 7% of revenue). The share count is +1.0% in a year, even though $8.45bn of shares were bought back in nine months.

Forward P/E 20.2 (NTM) or 30.0 on FY26 EPS vs forward 11.7–44.0 in FY21–25 (average 24.1); EV/EBITDA 32.6 vs 11.5–51.2 (average 26.1); P/FCF 42.4 vs 11.7–64.9 (average 30.7); P/S 18.7 vs 5.8–27.3. Around or above its own averages on everything except forward P/E. (The old finding used PEG and a trailing average distorted by VMware amortisation.)

The AI business rests on six XPU customers led by Google, Anthropic and OpenAI. The customers are spreading their purchases: Google also works with MediaTek, and Anthropic is looking at chips from Samsung. The previously cited top-5 share of about 50% was not found again in the 10-Q.

Together with Apollo and Blackstone, Broadcom has set up a platform that finances Anthropic's and OpenAI's roll-out. Broadcom guarantees up to about $29bn of one customer's lease payments over five years: on default Broadcom is liable for 85% of the remaining debt minus what the racks can be sold for. BofA estimates the maximum residual-value exposure at about $370bn around 2030.

Anthropic has pushed to slow the pace of the roll-out. Hock Tan said on 14/9 that the AI targets are unchanged.

Debt of $61.1bn in principal and net debt of $35.4bn, but net debt/EBITDA has fallen from 2.3 (FY24) to 0.7, and $10.5bn was repaid in FY26. The old figure of $66bn is outdated.

Chairman Henry Samueli sold $250m on 24/6 and another $250m on 23/9 (10b5-1 plan), and chief legal officer Mark Brazeal sold about $32m in June–July. The only purchase is board member Harry You for $0.37m on 11/6.

The Q4 forecast disappointed high expectations on 2/9, and the stock fell. The share price is −13.7% in a month and back at its end-2025 level, even though earnings are about 43% higher.

The FY26 AI forecast has been raised to $58bn (+186%), and management is aiming for about $115bn in FY27 and $230bn in FY28. Q4 revenue is guided at $34.8bn (+93%).

Remaining performance obligations (RPO) are $179.2bn, and about 25% is expected to be recognised within 12 months.

Dividends of $12.1bn plus buybacks of $8.45bn (TTM), $20.5bn in total vs FCF of $39.4bn; 15 years of dividend growth. The buybacks do not offset the dilution, though.