Broadcom’s Growth Cuts Effective Earnings Multiple to 15.9 by 2028
AVGO•Broadcom shares trading at $411.35 cost 35.5 times expected fiscal earnings but effectively price third-year 2028 earnings at just 15.9 times, a 55% lower multiple. Analysts forecast 48.1% annual revenue growth and management projects AI semiconductor revenue exceeding $100 billion in fiscal 2027.
1. Forward Valuation Discount
Broadcom’s current share price around $411 equates to 35.5 times this fiscal year’s expected earnings but, based on 2028 analyst estimates, translates to a 15.9 times multiple, reflecting a 55% valuation reduction over three years for patient investors.
2. Growth and Guidance
Analysts forecast annual revenue growth of 48.1% through 2028, building on recent 47.9% year-over-year gains. Management expects AI semiconductor revenue to more than triple next quarter and exceed $100 billion in fiscal 2027, with visibility extending into 2028.
3. Risks and Upside Scenarios
Historical market shocks have driven Broadcom stock down as much as 47% from peaks. Realized gains require the market to assign a multiple above the 15.9x floor; a 25.7x valuation on 2028 earnings would imply roughly 62% price appreciation from current levels.
