Broadcom (NASDAQ:AVGO | AVGO Price Prediction) continues to attract long-term investor interest, and after reviewing the data quarter after quarter, the case for accumulation keeps getting stronger. This is a position built on three specific, compounding reasons that keep improving.
Reason One: A Dividend That Actually Grows
Long-term investors want to be paid while they wait. Broadcom has raised its dividend for 15 consecutive years since fiscal 2011. The most recent increase was a 10% raise to $0.65 per share quarterly, declared in December 2025 and paid on March 31, 2026. That is not a token gesture.
A company that raises its dividend every single year through economic cycles, a massive acquisition, and a semiconductor downturn is telling you something real about its confidence in cash generation. That consistency earns a permanent slot in a long-term portfolio.
Reason Two: AI Revenue That Keeps Doubling
The growth trajectory here is unlike anything else in the sector. AI semiconductor revenue went from $4.40 billion in Q2 FY2025 (46% YoY) to $5.20 billion in Q3 FY2025 (63% YoY) to AI revenue growing 74% YoY in Q4 FY2025, and then to $8.40 billion in Q1 FY2026, up 106% year-over-year and above the company’s own forecast.
The acceleration is not slowing. Management guided for $10.7 billion in AI semiconductor revenue for Q2 FY2026. CEO Hock Tan has set a goal to exceed $100 billion in AI sales by 2027. That is a straight line from where the numbers already are.
Custom AI accelerators and Ethernet AI switches for hyperscale data centers are not commodity products. They are sticky, differentiated, and in escalating demand from customers that are spending aggressively on infrastructure.
Reason Three: Free Cash Flow That Funds Everything
Broadcom’s growth is backed by substantial cash generation. Broadcom generates real cash at a scale that funds dividends, buybacks, and balance sheet improvement simultaneously. In Q1 FY2026, free cash flow hit $8.01 billion, representing 41% of revenue.
For full fiscal year 2025, free cash flow reached $26.91 billion, up 38.6% year-over-year. Adjusted EBITDA margins have held at 68% of revenue even as the top line accelerates.
The company authorized a new $10 billion share repurchase program through December 31, 2026, and already repurchased $7.8 billion in Q1 alone. Meanwhile, total liabilities fell 5.79% year-over-year as the balance sheet improves. This is a capital return machine that also delivers compounding growth.
What Could Go Wrong, and Why the Bull Case Remains Intact
The real risk is customer concentration: Broadcom’s AI revenue depends heavily on a small number of hyperscale cloud customers, and any pullback in their capex cycles would hit results quickly. That risk deserves serious consideration.
But with Q2 FY2026 revenue guided at approximately $22 billion, representing 47% year-over-year growth, and a long-term supply agreement with Google extending through 2031 already in place, the near-term visibility is as strong as any company in the sector offers.
Broadcom has beaten EPS estimates in 8 consecutive quarters, with an average day-of intraday move of +5.85% on earnings days. The execution record is not theoretical.
The forward P/E sits at 34x, and the analyst consensus target is $472.92 against a current price of $380.78. With AI revenue now at 43% of total revenue and still accelerating, the data supports a case for continued accumulation on meaningful pullbacks. The thesis keeps improving.
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