Because Broadcom Monetizes Alphabet, Meta, and OpenAI at Scale I Buy Again and Again

Because Broadcom Monetizes Alphabet, Meta, and OpenAI at Scale I Buy Again and Again Alex Sirois Wed, September 9, 2026 at 5:51 PM GMT+2 4 min read AVGO GOOG NVDA META Quick Read Broadcom (AVGO) targets $230B in AI revenue by fiscal 2028, with Q3 AI chip sales surging 221% YoY to $16. 7B. Hock Tan says custom XPUs outperform Nvidia (NVDA) GPUs at less than half the cost, making every hyperscaler a long-term Broadcom customer.

Broadcom converts 46% of revenue to free cash flow and has raised its dividend every year for 15 consecutive years. Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and Broadcom didn't make the cut.

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I keep hitting the buy button on Broadcom ( NASDAQ:AVGO ) because Hock Tan has quietly built the toll road that Alphabet, Meta, OpenAI, and Anthropic must drive down to reach their AI ambitions. Every custom accelerator these frontier labs deploy sends a fresh check to San Jose, and the checks are getting larger every quarter. 24/7 Wall St.

Hyperscaler Tollbooth in Plain Numbers Broadcom's fiscal Q3 2026 posted revenue of $29. 59B, up 85. 5% year over year, with AI semiconductor revenue of $16.

70B, up 221% YoY and 54% sequentially. Guidance for Q4 calls for AI chip revenue of roughly $21. 7B, up 236% YoY.

Hock Tan told the call, "Q3 demand was simply hot and we're just getting started. " The customer roster is where my conviction hardens. Broadcom serves six XPU customers, and management laid out the deployment map on September 2: multi-tens of billions of dollars of TPUs annually for Google, one gigawatt of Ironwood in 2026 and another five gigawatts of TPU v8i in 2027 for Anthropic, 1.

3 gigawatts of Jalapeno in 2027 for OpenAI with over 5 gigawatts across successor generations in 2028, and three generations of MTIA accelerators to Meta through 2027. Tan said Broadcom is "very much on target to exceed $30 in earnings per share in fiscal 2028" against an AI revenue outlook of $230 billion in fiscal 2028. Free Report, Just Released Why Didn't AVGO Make The Top 10 List?

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Enter Your Email and See the Ten → Cash Machine Feeding a Rising Dividend Q3 free cash flow reached $13. 67B, or 46% of revenue. That cash funds a dividend I keep reinvesting.

The board declared $0. 65 per share for Q3, the fifteenth consecutive annual increase since fiscal 2011. The quarterly payout has climbed from $0.

07 in December 2010 to today's rate. The EPS beat streak now sits at 10 quarters, with Q3 non-GAAP EPS of $3. 32.

Story Continues Passing on Nvidia With Fresh Capital The reflex AI chip pick is NVIDIA ( NASDAQ:NVDA ), and I own it too. What tilts new dollars toward Broadcom is a line Hock Tan delivered on the September 2 call: "when you co-develop a chip that is optimized for your particular LLM workloads, you will outperform any GPU" at "less than half the cost. " Broadcom said its TPU v8i is comparable to, or surpasses, the Vera Rubin GPU and that Jalapeno outperforms Grace Blackwell for inference workloads.

Every hyperscaler that concludes its economics require custom silicon becomes a Broadcom customer for a decade. Risk I Own With Eyes Open Customer concentration is real. Six XPU customers, four expected to be particularly large, means any single hyperscaler pulling back would leave a crater.

The one-month drawdown of 13. 84% shows how quickly sentiment swings on that fear. My answer: these customers are the labs building frontier models, their capex commitments run for years, and management said demand exceeds the current outlook while supply has already been secured for the $115 billion fiscal 2027 and $230 billion fiscal 2028 AI outlooks.

Buy Button Stays Active From Here The five-year total return sits at 720. 39% and the ten-year at 2,849. 28%.

When the operator collecting the toll compounds cash at 46% of revenue and raises its dividend every year, I keep feeding the meter. Got $1,000? Before You Buy AVGO, Read This If you have cash sitting in your account right now, give this two minutes.

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