Is Broadcom Still a Buy at a $1.6T Valuation?

Motley Fool graders weigh Broadcom’s elite margins and AI-driven growth.
But a stretched $1.6T–$1.7T valuation and ~25x sales leave limited margin for error.

– Panel scores: business 7–8/10, management 9/10; aggregated score 7.2/10.
– Revenue doubled since 2022; last two fiscal years were the strongest in eight years, driven by AI demand.
– Profitability: ~68% gross margin (recent four quarters) and ~36% trailing net margin; strong free cash flow.
– Balance sheet: roughly $16B cash vs. $65B debt; substantial cash generation despite leverage.
– Valuation risk: market cap ~$1.6T–$1.7T (~25x sales); Matt projects 5–10% returns, Rick projects 0–5%.
– Takeaway: elite business and management with AI exposure, but consider position sizing or waiting for a better entry due to valuation sensitivity.
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