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Broadcom (AVGO) stock has given back about 26% from its 52-week high of $495, trading near $369. The latest leg of the decline came after the company's Sept. 2 fiscal third-quarter report: record results, but fourth-quarter revenue guidance of about $34.8 billion, slightly below Wall Street’s expectations of $35 billion. A decade ago, in early September 2016, Broadcom shares closed at $16.08, adjusted for the 10-for-1 split in 2024.
They closed out last week at $357.89, more than 22 times that price. A $10,000 stake bought at that price has grown to about $222,000, before counting dividends. The total gain, however, is less interesting than the dividends.
Broadcom initiated its dividend in fiscal 2011 and has raised it every year since, including a 10% increase last December to $0.65 per quarter, marking the 15th consecutive annual increase. This puts the fiscal 2026 payout on target for $2.60 per share. Reinvesting dividends turned the $10,000 into about $290,000—a compound return of roughly 40% annually over 10 years.
In comparison, the same $10,000 in an S&P 500 index fund, reinvested, grew to about $43,000 over the same period. Most of the gains came after 2022. The stock gained 45% in 2017, finished flat in 2018, then compounded 24%, 39%, and 52% from 2019 to 2021.
By the end of 2022, the original $10,000 stake stood at about $35,000. Post-2022, the stock doubled in 2023, more than doubled again in 2024 (108% rise), and added 49% in 2025. The $35,000 stake grew to $215,000, with nearly nine-tenths of the decade’s gains occurring after 2022.
An investor holding through the first six years and exiting at the end of 2022 retained about $25,000 in gains but missed $188,000. Broadcom’s AI semiconductor revenue reached $16.7 billion in fiscal Q3 2026, up 221% year-over-year and 54% from the prior quarter. This stream now accounts for over half of its $29.6 billion quarterly revenue, which grew 86% year-over-year.
Net income was $13.1 billion, a 216% increase, and free cash flow nearly doubled to $13.7 billion. The drawdown of 26% is less unusual given prior peaks-to-trough declines of 28% in 2018 and 38% in 2022. CEO Hock Tan noted in the Sept. 2 earnings release that AI semiconductor revenue is expected to accelerate to $21.7 billion in Q4, up 236% year-over-year.
While expectations are stretched, the business growth remains robust, suggesting potential for further upside despite recent volatility.
Source: The Motley Fool
