Broadcom Tops Cisco as AI Bet With 23x P/E and $30 Billion Backlog
Updated
Updated · Yahoo Finance · Aug 15
Broadcom Tops Cisco as AI Bet With 23x P/E and $30 Billion Backlog
3 articles · Updated · Yahoo Finance · Aug 15
Summary
Broadcom emerged as the stronger AI investment after posting 143% AI semiconductor revenue growth to $10.8 billion, with Q3 guidance of $16 billion and bookings above $30 billion.
That growth comes at a lower valuation than Cisco—23 times earnings versus 26 times—despite Cisco delivering only about 15% total growth from its latest quarter.
Cisco still showed strong AI demand: full-year AI orders reached $9.3 billion, nearly double its $5 billion target, while Q4 AI infrastructure orders hit $4 billion and networking revenue rose 28%.
Broadcom’s edge rests on longer visibility and higher margins, with its AI backlog extending to 2028 and custom XPU programs tied to major AI customers including Google, Meta, OpenAI and Anthropic.
The main constraint on that thesis is concentration risk, as roughly six hyperscaler buyers underpin Hock Tan’s AI push toward a fiscal 2027 target above $100 billion.