By Cheng Xin,Contributor,Trefis Team

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Photo illustration by Cheng Xin/Getty Images
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From a quantitative perspective, the 90.4% change in Broadcom (AVGO) stock from 4/12/2025 to 10/9/2025 was mainly driven by a 71.0% change in the company’s Net Income Margin (%). There’s more to this story than simply numbers, so let’s first break down the stock price movements into their contributing factors.

Factors behind stock price movement

That’s one perspective on stocks. Trefis High Quality Portfolio assesses much more and is crafted to minimize stock-specific risk while offering upside potential.

Returning to the “change”: The alteration in fundamental factors such as valuation, revenue, and margins has a background story concerning the business and investor sentiment. Below, we have pinpointed critical developments that affected stock price movement for AVGO stock. As a brief background: AVGO offers semiconductor devices and infrastructure software, which includes set-top box system-on-chips, cable, DSL, and passive optical networking solutions.

Reasons Behind Broadcom Stock Movement

Broadcom showcased substantial growth in its AI semiconductor solutions, with Q2 fiscal year 2025 AI revenue rising 46 percent year-over-year to over $4.4 billion and Q3 AI revenue surging to 63 percent year-over-year to $5.2 billion due to strong demand for AI networking and custom AI accelerators. The company anticipates this robust growth in AI semiconductor revenue to persist into fiscal year 2026.

The company reported impressive financial outcomes for both the second and third quarters of fiscal year 2025, often surpassing Wall Street’s expectations for revenue and adjusted earnings per share.

Broadcom’s infrastructure software sector, significantly enhanced by the VMware acquisition, exhibited strong performance, with Q2 revenue reaching $6.6 billion, a 25 percent year-over-year increase, and Q3 revenue climbing to $6.8 billion, a 17 percent year-over-year increase, primarily due to strong adoption of VMware Cloud Foundation.

The company achieved a record consolidated backlog of $110 billion in Q3, with AI-related demand being a major contributor to the semiconductor segment, providing substantial revenue visibility for upcoming periods. Broadcom also offered optimistic guidance for its fourth quarter of fiscal year 2025 and reaffirmed high confidence in achieving long-term growth objectives.

Several Wall Street analysts maintained or upgraded their ratings for Broadcom and increased price targets, leading to a consensus “Strong Buy” rating due to the company’s strong performance in the AI and infrastructure software sectors.

Our Current Assessment of AVGO Stock

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Opinion: We currently find AVGO stock appealing yet volatile. Why is that? Take a look at the complete story. Read Buy or Sell AVGO Stock to understand what informs our current viewpoint.

Risk: However, AVGO is not insulated from significant decreases. It declined nearly 48% during the Covid pandemic, approximately 35% in the 2021 inflation shock, and around 27% during the 2018 correction. Even with solid fundamentals, it’s evident that the stock can experience significant drops when the market turns. Strong companies still endure difficulties when sentiment shifts dramatically.

Consistently selecting winners is a challenging endeavor – particularly due to the volatility associated with individual stocks. Instead, the Trefis High Quality (HQ) Portfolio, which comprises 30 stocks, has a history of comfortably outperforming the S&P 500 over the past 4-year period. What accounts for this? As a group, HQ Portfolio stocks have delivered better returns with reduced risk versus the benchmark index; less of a roller-coaster experience, as demonstrated in HQ Portfolio performance metrics.

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