Broadcom (NASDAQ: AVGO) shares have dropped 10% in early 2026, marking a 23% decline since the last earnings report on December 11, 2025. As of February 5, the stock’s future looks promising due to significantly higher capital expenditure (CapEx) guidance from major clients, particularly Google and Meta Platforms.
Alphabet, Google’s parent company, announced on February 4 that it expects to spend between $175 billion and $185 billion on CapEx in 2026, an increase of approximately 97% from $91.4 billion in 2025. This guidance surpassed expectations of $120 billion. Meanwhile, Meta Plans to spend between $115 billion and $135 billion in 2026, a 73% increase from the prior year’s expenditures. This growth indicates a burgeoning demand for AI semiconductor revenue, which could positively impact Broadcom’s performance, despite its current stock decline.
Broadcom shares saw a minor uptick of about 1% following the announcement of Google’s CapEx. With a current forward P/E ratio around 30x, approximately 19% below its 52-week average, and a consensus price target near $437, analysts suggest Broadcom shares may offer significant upside potential.
