Broadcom Is 26% Below Its High. What $10,000 Bought a Decade Ago, and When the Gains Landed.
I'm LongbridgeAI, I can summarize articles.Broadcom (AVGO) stock has declined 26% from its 52-week high following Q3 fiscal results that slightly missed revenue guidance. Despite the pullback, a decade-long analysis shows significant growth: a $10,000 investment in 2016 grew to ~$290,000 with reinvested dividends, outperforming the S&P 500. Most gains occurred post-2022, driven by AI semiconductor revenue surging 221% year-over-year. CEO Hock Tan expects further acceleration in Q4. The article argues that past deep drawdowns preceded strong recoveries, suggesting the current dip may be an opportunity given accelerating business fundamentals.
Broadcom (AVGO -1.13%) stock has given back about 26% from its 52-week high of $495, trading near $369 as of this writing. 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, a touch below the $35 billion Wall Street was looking for.
A drawdown like that invites a longer look back. A decade ago, in early September 2016, Broadcom shares closed at $16.08, adjusted for the 10-for-1 split the company carried out 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, and that's before counting a single dividend.
The total, though, is arguably the less interesting half of the record. The money didn't arrive anywhere close to evenly.
Image source: The Motley Fool.
Counting the dividends
Broadcom initiated its dividend in fiscal 2011 and has raised it every year since. A 10% increase last December, to $0.65 per quarter, was the 15th consecutive annual increase, and it puts the fiscal 2026 payout on target for $2.60 per share.
Those payments change the decade's math. A shareholder who reinvested every dividend along the way turned the $10,000 into about $290,000 -- a compound return of about 40% a year for 10 years.
The same $10,000 in an S&P 500 (^GSPC -0.48%) index fund, dividends reinvested, grew to about $43,000 over the same stretch. In other words, the same decade that quadrupled an index fund's money multiplied Broadcom's by 29.
Most of the money arrived after 2022
The first six years were excellent by almost any standard. The stock gained 45% in 2017, finished 2018 about flat, then compounded 24%, 39%, and 52% across 2019 through 2021.
Even after a 16% drop in 2022, the original $10,000 stood at about $35,000 by the end of that year. That works out to about 22% annualized, without counting dividends.
What followed made those six years look modest. Not only did the growth stock double in 2023, but it more than doubled again in 2024, rising 108%. And it added another 49% in 2025.
The $35,000 became about $69,000, then about $144,000, then about $215,000. Nearly nine-tenths of the decade's total gain arrived after the end of 2022.
Put another way, an investor who owned the stock for those first six years and stepped away at the end of 2022 kept about $25,000 of gain and missed about $188,000.
The stock was tracking the business. Broadcom's artificial intelligence (AI) semiconductor revenue reached $16.7 billion in the fiscal third quarter of 2026, the three months that ended Aug. 2 -- up 221% from a year earlier and 54% from the prior quarter. That revenue stream now accounts for more than half of the company's $29.6 billion of total quarterly revenue, which grew 86% year over year.
Net income was $13.1 billion, 216% more than a year earlier, and free cash flow nearly doubled as well, to $13.7 billion, or 46% of revenue.
Does the drawdown change the story?
Set against the full record, a 26% slide looks less unusual. The decade's path included peak-to-trough slides of 28% in 2018 and 38% in 2022, and a drop of about 28% in the first three months of 2025. And each of those stretches came just before some of the run's strongest legs.
NASDAQ: AVGO
Key Data Points
That's no promise, of course. A past recovery doesn't make the current markdown safe, and the next leg could just as easily be down. But I keep coming back to one fact -- every dollar of the 22-fold decade went to shareholders who held through slides at least as deep as this one.
The growth behind the late surge is still accelerating, too. The tech company's revenue rose 28% year over year in the fiscal fourth quarter of 2025, then 29%, 48%, and 86% across the three quarters since, and guidance calls for 93% growth in the current quarter.
"In Q4 the momentum continues, and we expect AI semiconductor revenue to accelerate to $21.7 billion, up 236% year-over-year," said CEO Hock Tan in the Sept. 2 earnings release.
Sure, expectations are stretched. After all, a guidance shortfall of less than 1% was enough to knock the stock down last week, and a stock that has fallen 26% may keep falling.
But the business that produced those returns is growing faster now, I'd argue, than at almost any point in the decade. I'd buy shares at this level, and I'd plan on holding them through stretches like this one.