AVGO Expands Connectivity Portfolio to Tap 6G: What's Ahead?

Broadcom AVGO is expanding its Semiconductor Solutions segment portfolio with the launch of BroadPeak, a highly integrated radio digital front-end (DFE) SoC device. This is expected to boost AVGO’s footprint in next-generation 5G Advanced and 6G wireless infrastructure. BroadPeak is the first radio digital front-end solution that meets the technical requirements for the upcoming 5G Advanced standard using the higher frequency n104 band from 6.425 to 7.125 GHz, as well as the 6G standard using the upper mid-band from 7 to 8.5 GHz. The device features CMOS DFE and ADC/DAC blocks on a single chip, delivering up to 40% power reduction over existing solutions for massive MIMO and RRHs.

Expanding portfolio has been a key catalyst for AVGO’s prospects. The launch of its next-generation BCM4918 accelerated processing unit (APU) alongside two new dual-band Wi-Fi 8 devices, the BCM6714 and BCM6719, expanded the company’s Wireless Device Connectivity solutions business. The launch of BroadPeak further strengthens the business, thereby benefiting Broadcom’s semiconductor revenues. The segment benefits from strong demand for XPUs, which are a type of application-specific integrated circuit (ASIC) necessary to train Generative AI (Gen AI) models. 

AVGO now expects first-quarter fiscal 2026 AI revenues to double year over year to $8.2 billion. Broadcom expects first-quarter fiscal 2026 Semiconductor revenues of $12.3 billion, suggesting 50% year-over-year growth. The Zacks Consensus Estimate for Semiconductor revenues is currently pegged at $12.09 billion, indicating 47.3% year-over-year growth.

AVGO Faces Tough Competition in the Semiconductor Market

Broadcom is a major player in the semiconductor market, but is facing stiff competition from NVIDIA NVDA and Skyworks SWKS.

NVIDIA is benefiting from the strong growth of AI and high-performance accelerated computing. The growing demand for Gen AI and large language models using GPUs based on NVIDIA’s Hopper and Blackwell architectures is aiding data center revenues. In the third quarter of fiscal 2026, revenues from Data Center (which accounted for 89.8% of NVDA’s revenues) jumped 66% year over year and 25% sequentially to $51.22 billion.

Skyworks’ products are designed for high-growth areas across a wide range of end markets, including connected vehicles, enterprise infrastructure, satellite communications, data center networking and emerging edge AI applications. In data center infrastructure, demand signals are improving across the SWKS customer base, supported by increasing design win activity. Timing and power management content is expanding as the ecosystem transitions to next-generation 800-gig and emerging 1.6-terabit architectures.

AVGO’s Share Price Performance, Valuation & Estimates

Broadcom shares have appreciated 63.1% in a year, outperforming the broader Zacks Computer and Technology sector’s return of 26.8%.

AVGO Stock Outperforms Sector

Image Source: Zacks Investment Research

The AVGO stock is trading at a premium, with a forward 12-month price/earnings of 28.77X compared with the broader sector’s 25.5X. Broadcom has a Value Score of D.

AVGO Stock has a Stretched Valuation

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $10.25 per share, up 4 cents over the past 30 days, suggesting 50.3% growth from fiscal 2025’s reported figure.
 

Broadcom Inc. Price and Consensus

Broadcom Inc. price-consensus-chart | Broadcom Inc. Quote

Broadcom currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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