AVGO Custom AI Chip Revenue: Google TPU & Meta MTIA in 2026
Broadcom is the quietest winner of the AI build-out. AVGO designs most of Google’s TPU, works on Meta’s MTIA, owns the networking switch market through Tomahawk and Jericho, and is rapidly turning VMware into a high-margin subscription business. Add a dividend that has grown double-digits for years and you get a rare megacap that pitches simultaneously to growth and income investors.
2026 Key Metrics Snapshot
Reference values only, these change daily.
| Metric | Value (approx.) |
|---|---|
| Market cap | ~$1.4T |
| Forward P/E | ~33x |
| Revenue growth YoY | ~18% |
| Operating margin | ~45% |
| Dividend yield | ~1.2% |
| 52-week range | ~$1,500–$2,300 |
Three Reasons AVGO Is In Focus Right Now
- Custom AI silicon. Google TPU, Meta MTIA and other hyperscaler chips are largely Broadcom-designed.
- Networking dominance. Tomahawk and Jericho switch silicon is the default fabric inside AI training clusters.
- VMware subscription flip. Software margins jumped as legacy licenses roll onto subscription contracts.
For how AVGO fits a semi basket, see NVDA 2026 outlook and AMD 2026 outlook.
Bull Case vs Bear Case
Bull case
- Hyperscaler custom silicon volumes double in 2026
- VMware ARR growth outpaces customer churn
- Dividend keeps compounding double-digits
Bear case
- NVIDIA GPUs reabsorb custom silicon demand
- VMware customer exodus accelerates after contract resets
- Post-acquisition debt becomes expensive if rates rise again
Pair this with our AI stocks investment guide 2026 for the broader thesis.
What US Retail Investors Should Actually Do
- Brokerage: Share price is high, so fractional shares at Fidelity, Schwab or Robinhood matter a lot here.
- Tax wrapper: The dividend makes AVGO less tax-efficient in taxable accounts than zero-yield names. A traditional IRA or Roth is ideal.
- Long-term capital gains: Hold more than 12 months to avoid ordinary income rates on gains.
- Sizing: Treat AVGO as a dividend-growth sleeve holding. 3–5% is a reasonable ceiling for most diversified portfolios.
If you want income overlays on AI names, compare with our NVDY vs CONY covered call comparison.
Frequently Asked Questions
Q. Should I expect another stock split? A. After the 10:1 in 2024, the price ran again. A second split is plausible but never guaranteed.
Q. Is AVGO safer than NVDA? A. The cash flow profile is steadier because of VMware, but no AI-exposed stock is truly defensive.
Bottom Line
AVGO in 2026 is the rare stock that can pitch both AI upside and a growing dividend without looking schizophrenic. Build the position slowly, reinvest the dividend, and let the compounding do the work.
This is not investment advice. Do your own research and size any position to your personal risk tolerance.
Is AVGO a dividend growth stock or a growth stock?
Both. It yields roughly 1.2% but has grown the dividend double-digits annually for years, rare in the AI complex.
How important is the Google TPU relationship?
Very. Broadcom designs large portions of Google's TPU and does similar work for Meta's MTIA, which powers the custom AI silicon narrative.
Did the VMware deal actually work?
Yes, financially. Aggressive subscription conversion lifted software segment margins materially, though customer churn headlines persist.
Is the valuation reasonable?
On forward earnings it's in line with other AI enablers. The bull argument rests on dividend growth plus custom silicon optionality.
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