Broadcom's Custom-Silicon Bet Comes Into Sharper Focus as the Stock Slogs Through a Soft Patch
Published on 09/17/2026 at 19:01 | Editorial boerse-global.de
Broadcom shares have spent the past month moving in the wrong direction, and the disconnect between the company's escalating AI ambitions and its recent trading performance has become the central puzzle for anyone holding the name.
The stock last changed hands around $339.51 on the Nasdaq, down more than 13% over the past month and off 1.54% year to date. That slide persists even though the average price target among 49 surveyed analysts sits at $531.85. In German trading, the shares were quoted at EUR 303.90, a gain of 2.7% on the prior day's close and still roughly 21% above the annual low touched in early February. An RSI reading of 41.3 doesn't point to oversold conditions so much as a consolidation phase following the sharp 30-day retreat.
Meta's Roadmap Puts a Date on the Custom-Chip Story
What has been largely an abstraction for investors — the promise of bespoke hyperscaler silicon — gained a concrete timeline this week. According to a Bloomberg report picked up by BofA Securities, Meta intends to deploy "Astrid," the MTIA 500 chip co-developed with Broadcom, for AI inference starting in late 2027. That follows an earlier-generation part dubbed "Arke," slated for the first half of 2027.
Meta reportedly expects more than a gigawatt of additional in-house chip capacity within twelve months, while BofA's estimate runs higher still: five to six gigawatts of proprietary capacity in 2027, carrying a total price tag of roughly $200 billion. Partnerships of this kind are precisely the growth lever investors are watching most closely, since they shift a portion of demand away from standard GPUs toward Broadcom's tailored designs.
Chief executive Hock Tan has framed the opportunity in sweeping terms, pegging expected AI semiconductor revenue at about $115 billion in fiscal 2027 and roughly $230 billion in 2028. The stated goal is $350 billion in AI chip sales from six frontier customers within two years. That concentration cuts both ways, feeding questions about dependence on a handful of large buyers even as management describes its supply chain as secured for years ahead.
Should investors sell immediately? Or is it worth buying Broadcom?
Growth Is Real — and So Is the Margin Cost
The operating picture is more nuanced than the headline growth rates suggest. AI semiconductor revenue alone surged 221% to $16.70 billion. Yet gross margin slipped 210 basis points sequentially to 75% in the third quarter, with a further decline to about 73% expected in the current period, against 78% a year earlier. Rapid AI expansion, in other words, is eating into profitability — a trade-off shareholders must weigh against the top-line trajectory.
Those third-quarter results, for the period ended August 2, showed revenue of $29.6 billion, up 86% year over year, with adjusted operating income of $20.1 billion and adjusted earnings per share of $3.32. The numbers demonstrate that Broadcom has so far scaled its growth profitably.
Analysts Stay Constructive Even as the Tape Weakens
The sell-side remains overwhelmingly positive. Rosenblatt's analyst reiterated a buy rating with a price target raised to $600, anchored on 18 times an expected fiscal 2028 earnings per share above $30. Piper Sandler reopened coverage on September 10 with a buy rating and a $460 target. Of the 49 tracked ratings, 37 are buys and eight are strong buys; just four call the stock a hold, and there are no sell recommendations.
The pullback looks at odds with the fundamental backdrop. Broadcom lifted its fiscal 2027 AI chip revenue forecast from about $100 billion to roughly $115 billion alongside its latest quarterly results, and held out about $230 billion for fiscal 2028 — growth spurts that are rare in the chip industry and had initially stoked expectations further. Since that guidance upgrade just over a week ago, the shares have given up 5.7%, and the 30-day decline stands at 8.9%, a sign of how firmly the stock has come under pressure. Pre-market on Thursday, the stock was quoted at EUR 298.95, up 1.0%, following a close of EUR 296.00 on Wednesday.
A Dividend That Keeps Paying While the Chart Wobbles
Income-focused investors got a reminder of the steadier side of the story: the board declared a quarterly dividend of $0.65 per share, payable September 30 to holders of record as of 5:00 p.m. Eastern Time on September 21. Through periods of price weakness, that payout has remained a dependable component of the investment case.
The next quarterly report is scheduled for December 9, 2026, and should clarify whether the custom-chip pipeline with Meta and other hyperscalers justifies the current share-price softness — or whether the market is underestimating the pace of growth still ahead.
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