Broadcom’s stock price has been on a remarkable run this year. It reached a record high of $370, marking a 60% gain so far in 2025. Over the last five years, the stock has surged nearly 1,000%.
The company’s growth has been fueled largely by artificial intelligence. Broadcom recently reported revenue of $15.9 billion, up 22% from last year. Its AI-related business saw the biggest jump, rising 63% to $5.2 billion. Analysts expect this segment to continue growing strongly, with revenue projected at $6.2 billion in the current quarter.
A major driver of the recent surge is Broadcom’s deal with OpenAI to build custom AI chips, worth over $10 billion. This positions Broadcom as a key supplier of AI and other custom chips. OpenAI hopes this will reduce its dependence on NVIDIA chips. The deal could also bring more orders from companies like Microsoft, Google, and Amazon.
Wall Street analysts are optimistic. Broadcom’s revenue for the current quarter is estimated at $17.4 billion, up 24% from last year. Earnings per share are expected to grow 33% to $1.87. Analysts predict revenue of $18.14 billion next quarter and $63 billion for the full year, rising to $83 billion in 2026. Broadcom has a history of beating expectations, which adds to investor confidence.
However, the stock is very expensive. Its forward price-to-earnings ratio is 79, far above the sector median of 31. Non-GAAP forward multiples and PEG ratios are also high, meaning the stock would normally be at risk of a pullback. But the OpenAI deal and momentum from AI growth make Broadcom a strong momentum stock, and it could benefit from an upcoming interest rate cut by the Federal Reserve.
Technically, the stock remains strong. Broadcom broke through key resistance at $251 earlier this year, invalidating a double-top pattern. Indicators like the ADX, RSI, and MACD suggest bulls are in control. The next psychological target for investors is $400, and current trends point toward continued gains in the near term.
Broadcom’s rise shows how AI and strategic partnerships can propel a stock even when valuations are high, but investors should remain aware of potential risks given the steep price.