What Is Happening With Broadcom Stock?

Core Viewpoint - Broadcom's stock experienced an 11.4% decline due to concerns over AI-related revenue pressure on gross margins and a subdued growth outlook for its AI business, raising questions about the sustainability of its growth and margin trajectory [2] Company Overview - Broadcom operates as a $1.7 trillion company with $60 billion in revenue, currently trading at $359.93 [2] - The company has achieved a 12-month revenue growth of 28.0% and maintains an operating margin of 39.0% [2] - Broadcom's liquidity is characterized by a Debt to Equity ratio of 0.05 and a Cash to Assets ratio of 0.06 [2] Valuation Metrics - Broadcom's stock is categorized as Attractive but Volatile, with a P/E multiple of 68.6 and a P/EBIT multiple of 56.5 [3][6] - Historically, the stock has provided a median return of 140% within a year after sharp declines since 2010 [6] Downturn Resilience - In various economic downturns, Broadcom's stock has shown a slightly worse impact compared to the S&P 500 index, both in terms of the extent of decline and speed of recovery [4] - For instance, the stock declined by 36.7% from a high of $67.43 on December 27, 2021, to $42.71 on October 14, 2022, while the S&P 500 experienced a peak-to-trough decline of 25.4% [7] - The stock rebounded to its pre-Crisis peak by May 18, 2023, and reached a high of $412.97 on December 10, 2025, currently trading at $359.93 [7] Historical Performance - During the 2020 Covid Pandemic, Broadcom's stock fell by 48.3% from a high of $32.47 on February 12, 2020, to $16.79 on March 18, 2020, compared to a 33.9% decline for the S&P 500 [8] - The stock regained its pre-Crisis peak by August 4, 2020 [8] - In the 2018 correction, the stock fell 28.9% from a high of $28.46 on November 27, 2017, to $20.25 on July 13, 2018, while the S&P 500 had a peak-to-trough decline of 19.8% [9] - The stock fully recovered its pre-Crisis peak by March 15, 2019 [9]