Key Takeaways: Broadcom (AVGO), surpassing $20 billion in AI revenue in 2025, has built a unique moat with 'Custom Chips (ASIC)' and 'AI Networking' amidst NVIDIA's dominance. We analyze the 2026 partnership outlook with OpenAI and Google, along with dividend growth potential.
While everyone rides the emotional rollercoaster of NVIDIA's stock price fluctuations, the smart money on Wall Street is quietly watching Broadcom's (AVGO) order backlog. As of December 22, 2025, Broadcom has been completely re-evaluated from a simple communications chip company to an essential enterprise responsible for the 'Central Nervous System of AI Infrastructure'.
Especially for investors seeking both stable management of retirement funds and growth potential, Broadcom's powerful cash flow and exclusive technological capabilities are emerging as the best alternative to hedge against NVIDIA's high volatility. We provide an in-depth analysis of the 2026 revenue outlook and key investment points.
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| Analyzing Broadcom's 2026 growth potential |
1. 2025 Earnings Review & 2026 Guidance Analysis
Broadcom's fiscal year 2025 can be defined in one phrase: 'Explosive Growth in AI Revenue'. More than half of the total semiconductor solution revenue now comes from the AI sector, marking a successful structural transformation.
- 2025 Total AI Revenue: Recorded approximately $20 billion, a rapid growth of over 60% compared to the previous year (approx. $12 billion).
- Q1 2026 Guidance: Management presented total revenue guidance of approximately $19.1 billion for the first quarter of fiscal year 2026, forecasting that AI-related revenue would reach $8.2 billion, a 2x increase year-over-year.
These figures prove that Broadcom is absorbing actual infrastructure construction demand, regardless of any 'AI bubble' theories.
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| Achieving $20 billion in AI revenue in 2025 and rapid growth trend |
💡 Investor Insight: What is an ASIC?
ASIC (Application-Specific Integrated Circuit) is like a bespoke suit designed for a specific purpose. If NVIDIA GPUs are versatile off-the-rack suits, companies like Google and Meta commission Broadcom to design their own AI chips (ASICs) for power efficiency and cost reduction. Broadcom is the overwhelming leader in this market.
2. Three Secret Weapons Driving 2026 Growth
The reason Wall Street is looking forward to 2026 is that as Big Tech companies accelerate their 'De-NVIDIA' movement, Broadcom's custom chip orders are exploding.
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| Custom AI chips for the Big Tech trio (Google, OpenAI, Meta) |
3. AI Networking: The Only Rival to NVIDIA
In AI data centers, 'Networking' technology to bind tens of thousands of GPUs into a single unit is essential. While NVIDIA promotes its proprietary 'InfiniBand' standard, Broadcom dominates the global standard 'Ethernet' market.
Broadcom's Tomahawk 5 and Jericho3-AI switch chips dramatically increase data transfer speeds, shortening training times for Large Language Models (LLMs). As data centers grow larger, Broadcom's networking equipment revenue is structured to increase exponentially.
"If GPUs are the brain of AI, Broadcom's networking is the neural network connecting those brains. Without the neural network, no supercomputer can function."
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| Broadcom's Ethernet technology connecting tens of thousands of GPUs at ultra-high speeds |
4. The Appeal as a Dividend Growth Stock (Target $2.60)
The decisive reason Broadcom is attractive to active senior investors is 'Growing Dividends'. CEO Hock Tan is famous as a manager who is very proactive in shareholder returns.
For fiscal year 2026, the annual dividend per share is expected to be around $2.60. As debt reduction following the VMware acquisition proceeds rapidly, the scale of share buybacks is also expected to expand. This serves as a powerful defense mechanism during stock price downturns.
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| Investment strategy growing retirement assets with stable dividend growth |
Conclusion: An Essential Portfolio Stock for 2026
If 2025 was Broadcom's transition period into AI, 2026 is the time to harvest the fruits. With solid clients like OpenAI and Google, and the Ethernet technology essential for AI data center expansion, Broadcom is the only company capable of growing alongside NVIDIA while keeping its dominance in check.
Rather than worrying about short-term price fluctuations, a valid strategy is to trust in the structural growth of the 3nm process transition and the custom chip market, reinvest dividends, and hold for the long term.
Frequently Asked Questions (FAQ)
Q. What is the proportion of Broadcom's AI revenue?
As of 2025, AI-related revenue is approximately $20 billion, accounting for more than 50% of total semiconductor solution revenue, firmly establishing itself as a core business.
Q. What is the dividend outlook for 2026?
According to Wall Street analysis, an annual dividend payout of approximately $2.60 per share is expected for the fiscal year 2026, with continued increases anticipated.
Q. How does Broadcom compare to NVIDIA?
While NVIDIA monopolizes the GPU market, Broadcom serves as an essential partner (ASIC) for Big Tech companies building their own chips and as a network equipment supplier. This enables stable growth through 'collaboration and infrastructure' rather than direct competition.