Spare a Thought for Broadcom Shareholders

After Nvidia’s earnings, I was almost shocked to see how the company’s estimates for next year surpassed far above consensus estimates and yet the stock has barely outperformed the S&P 500 (and actually underperformed both the QQQ and the semiconductor ETF). Well, spare a few thoughts for Broadcom shareholders then. At least, Nvidia stock is up ~20% YTD whereas Broadcom stock is essentially flat YTD during perhaps one of the most lopsided demand-supply compute markets ever! And yes, just like Nvidia, sell-side wasn’t even remotely close to the outlook Broadcom provided for 2028. At the beginning of 2026, analysts were estimating $162 Billion revenue for Broadcom in FY2028. After the 2028 outlook provided by Broadcom in 3Q’26 call, the estimate has shot up by more than $100 Billion over the course of this year to reach ~$270 Billion!

These aren’t just empty calories either; Broadcom started the year with 2028 EPS estimate of $17.6. It’s now $30!

So, 2028 EPS estimate rose by ~70% over the course of this year and the stock is down YTD in a market full of investors chasing accelerating topline and upward estimates revision? What!!??

I know, I know I am supposed to say buy-side estimates were already up there and sell-side estimates here are obsolete. But can we please not pretend that buy-side was estimating $30 EPS for 2028 at the start of this year? Whether you’re buy-side or sell-side, I have little doubt that the estimates for Broadcom became higher over the course of this year. So the fact that Broadcom stock has lagged the benchmarks so badly must be due to something else.

As the saying goes, the “meta” is always changing in the stock market. Just when you think you know how the market works in the short-term (“Just buy accelerating topline, bro”) and most people start to believe that mantra, it may start to stop working. As an intended long-term shareholder of every stock I own, I admittedly admire all the ways market can confound short-term investors as it makes me feel good to not need to waste my brain cells to explain tick-by-tick changes in the stock price in the short term.

So, no, I’m not going to be able to explain why Broadcom stock hasn’t been “working” this year, but behind the paywall, I will share some interesting divergences between Nvidia and Broadcom based on their respective earnings calls.

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