Broadcom Inc. (AVGO) Stock Analysis

Broadcom’s primary competitive advantage lies in its scale, breadth, and integration across both semiconductors and infrastructure software. In semiconductors, Broadcom is the leading supplier of networking chips for data centers and AI workloads, with merchant silicon and custom AI accelerators that serve hyperscale customers such as Google and, reportedly, OpenAI. Its networking chip business is widely regarded as best-in-class for high-speed switching and routing, a position underpinned by decades of engineering expertise and deep customer relationships. For example, Broadcom’s AI chip revenue grew 63% year-over-year in Q3 2025, reaching $5.2 billion—now over a quarter of total company revenue.

In wireless, Broadcom dominates the market for FBAR filters, a critical component in high-end smartphones, particularly Apple’s iPhone. These filters are technologically complex and built on non-silicon materials, creating high barriers to entry. Apple, a key customer, is unlikely to easily replicate this capability in-house.

On the software side, the VMware acquisition has entrenched Broadcom in enterprise IT, with a focus on virtualization and private cloud. The company’s software is deeply embedded in large enterprises, creating high switching costs and recurring revenue streams.

Compared to rivals such as Marvell, Qualcomm, and Nvidia, Broadcom’s combination of best-in-class hardware, sticky software, and operational efficiency (operating margins >35%) provides a durable, multi-pronged moat. However, customer concentration and reliance on TSMC for manufacturing remain notable risks.