AVGO: Why Broadcom Stock Jumped 110%?

Broadcom (AVGO)’s stock didn’t merely rise – it soared over 100%, driven by more than just impressive figures. A nearly 10% increase in revenue and a remarkable 71% rise in net margin suggested enhanced efficiency, but the true excitement lay just beneath the surface.

Investors are rallying around the company’s ambitious advancements in artificial intelligence, selling application-specific integrated circuits (ASICs) — custom chips that big tech companies use to run AI workloads efficiently, besides supplying high-speed networking solutions.

Buoyed by stronger-than-expected Q2 results and a wave of upward analyst revisions, Broadcom’s latest surge reflects not just growth, but a strategic evolution — making its stock’s rise a story worth watching.

So what is going on here? The stock price surged an impressive 108%, fueled by a mix of significant factors. Revenue saw a modest increase of 9.9%, and the net margin experienced a notable rise of 71%, indicating enhanced profitability. In the meantime, the valuation, reflected by the P/E multiple, grew by 11%, pointing to increasing investor confidence. Collectively, these elements illustrate the reasons behind the price movement – creating the opportunity to examine the specific events, announcements, and strategic actions that contributed to this strong performance.

Before delving into the events that contributed to the stock increase, here’s what market wisdom suggests: investing in a single stock can be risky, but there is significant value in a more diversified approach, exemplified by the Trefis High Quality Portfolio. Should you purchase one stock you prefer or develop a portfolio designed to thrive across market cycles? Our data reveal that the High Quality Portfolio has turned the uncertainty of stock selection into consistent market-beating performance. This portfolio is incorporated into the asset allocation strategy of Empirical Asset Management – a Boston-based wealth manager and Trefis partner – whose asset allocation framework generated positive returns during the 2008-09 period when the S&P experienced losses of more than 40%.

Separately, see – S&P 500 Poised For A 40% Crash?

Here Is Why Broadcom Stock Moved

• Exceeding Q3 Fiscal Year 2025 Earnings Expectations: Broadcom showcased robust earnings for the third quarter of fiscal year 2025, exceeding analysts’ expectations with an EPS of $1.69, surpassing the anticipated $1.66. Revenue hit a record $16 billion, outpacing the expected $15.82 billion. This resulted in a positive market response, leading to a rise in stock price post-announcement.
• Accelerated AI Semiconductor Revenue Growth: AI semiconductor revenue continued to be a major force. In Q3 2025, AI revenue surged by 63% year-over-year to $5.2 billion, marking ten consecutive quarters of growth. Broadcom also provided strong guidance for Q4, projecting AI revenue to escalate to $6.2 billion, denoting a 66% year-over-year increase, indicating sustained strong demand from hyperscale partners.
• Landmark OpenAI Partnership: On October 13, 2025, Broadcom and OpenAI announced a multi-year strategic partnership to co-develop and deploy 10 gigawatts of custom AI accelerator racks, starting in late 2026 and extending through 2029. This significant agreement is expected to solidify Broadcom’s position as a leader in AI infrastructure and could potentially add a considerable amount to its revenue. The partnership includes custom AI chips, Ethernet fabrics, and power-intensive racks for AI computing.
• Strong Analyst Ratings and Price Targets: As of October 15-16, 2025, analysts maintained a consensus rating of ‘Buy’ or ‘Strong Buy’ for Broadcom (AVGO). Several firms reaffirmed their ‘Outperform’ ratings and raised price targets, with an average target ranging from $352.96 to $372.33 and a peak target of $450.00, reflecting ongoing confidence in the company’s growth trajectory, particularly in AI.

Our Current Assessment Of AVGO Stock

Opinion: We currently consider AVGO stock appealing yet volatile. Why? Explore the full narrative. Read Buy or Sell AVGO Stock to understand what shapes our current viewpoint.

Risk: Nevertheless, AVGO is not exempt from significant declines. It dropped nearly 48% during the Covid pandemic, around 35% during the inflation shock in 2021, and about 27% during the 2018 market correction. Even with strong fundamentals, it’s evident that the stock can experience a sharp decline when the market shifts. Good companies still feel the impact when sentiment changes drastically.

Consistently picking winners is a challenging endeavor – particularly given the volatility associated with individual stocks. In contrast, the Trefis High Quality (HQ) Portfolio, consisting of 30 stocks, has shown a history of comfortably outperforming the S&P 500 over the past 4-year period. What accounts for this? As a collective, HQ Portfolio stocks have provided superior returns with less risk compared to the benchmark index; a smoother investment journey, as demonstrated in HQ Portfolio performance metrics.