👉 Breaking Down Broadcom (AVGO)

Happy Tuesday.

We’re thrilled to share a comprehensive breakdown of a stock that’s up more than +800% over the past five years.

Few people realize it… but this is the seventh-largest company in the world by market cap!

As a reminder, this specific deep-dive is written by the GRIT team and is not the exclusive work of Head Analyst Austin Hankwitz.

Stock Deep Dive: Broadcom (AVGO-US, $1.64T MCAP)

Every business school talks about a core concept: Porter’s 5 forces.

The model includes five competitive forces: Rivalry among existing competitors, Threat of new entrants, Threat of substitute products, Bargaining power of buyers, and Bargaining power of suppliers.

As Nvidia continues to dominate the AI space, one of these forces comes to the forefront: the bargaining power of suppliers.

Nvidia is able to enjoy software-like margins despite selling hardware because there aren’t viable alternatives for major cloud players in the marketplace when it comes to running the compute that AI requires. This allows them to set price.

This means that the power of suppliers (Nvidia) is high.

That is, until Broadcom’s recent momentum. We always knew that Broadcom was powering some of the major cloud providers, but their list of customers just added a major one.

When one player dominates an ecosystem with margins at these levels, the old Bezos quote also comes to mind, “Your margin is my opportunity.”

Enter Broadcom.

• Why now? 👉 Broadcom Just Signed a New Partner: OpenAI

• Overview 👉 What Does Broadcom Do?

• Role in Ecosystem 👉 How they Fit into the Stack

• How Do They Win? 👉 Value Proposition

• Business Units 👉 Segment Breakdown

• How Do They Make Money? 👉 Revenue Model

• By The Numbers 👉 Key Metrics

• Competition and Outlook 👉 Battling AMD and Nvidia

• Risks 👉 Potential Pitfalls

Why now? 👉 Broadcom Just Signed a New Partner: OpenAI

Broadcom’s stock is surging near record highs, up roughly 50% year-to-date, after a blockbuster quarterly report and a game-changing new partnership with OpenAI. The ChatGPT creator is joining Broadcom’s roster of hyperscale customers (alongside Google, Meta, and ByteDance) all seeking more cost-effective AI chips as alternatives to Nvidia’s pricey GPUs. This $10+ billion deal (hinted at on Broadcom’s earnings call and confirmed by media reports) commits Broadcom to co-develop OpenAI’s first in-house AI accelerator, starting in 2026. The news sent Broadcom shares soaring 15% in a single day, signaling Wall Street’s belief that Broadcom can challenge Nvidia’s dominance and seize a bigger slice of the AI silicon boom.

Broadcom is more than just another chipmaker riding the AI wave. Its unique mix of semiconductor strength and software stability makes it a relatively defensive play in the tech sector. The OpenAI win will accelerate Broadcom’s growth from 2026 onward, providing “additional impetus” through 2027. At the same time, Broadcom’s large base of recurring software revenue (from past acquisitions like VMware) gives it an oasis of steady cash flow even if the broader economy softens.

This moment represents a pivotal inflection point. Broadcom has spent years assembling a portfolio of mission-critical tech (from network chips to mainframe software), and it’s now executing on a vision to turn that into sustained financial strength. By securing marquee clients like OpenAI (much as it did with Apple in wireless), Broadcom is locking in future revenue streams and a seat at the table of AI’s future. The company’s strategy of massive scale + deep customer partnerships is shaping up nicely.

Overview 👉 What Does Broadcom Do?

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