2026 hasn't been good to Broadcom (NASDAQ:AVGO) stock. At roughly $300 as I write this, the chip designer's shares trade about 13% under their 2025 close of $346.10.
A losing year is rare for this stock. Since its August 2009 listing as Avago Technologies, the stock has ended just two calendar years lower. Shares dipped around 1% in 2018 and dropped 16% in 2022. But both times, a strong year followed, with the stock gaining 24% in 2019 and almost doubling in 2023.
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So it's tempting to read this year's drop as the setup for another rebound. I'm not sure the pattern holds this time, though. The S&P 500 (SNPINDEX:^GSPC) dropped around 6% in 2018 and 19% in 2022, so Broadcom beat the index both times. This year, the index is up about 9%.
If 2026 ended today, it'd be the first calendar year since its debut that Broadcom lagged the S&P 500 by over 5 percentage points.
Image source: The Motley Fool.
Two losing years, two rebounds
Neither earlier drop was about the business. Broadcom's revenue climbed 18% in fiscal 2018 to almost $21 billion. Free cash flow grew even faster, up 50%. Fiscal 2022 revenue rose 21% to a record $33.2 billion.
Strangely, the rebound years were the slower ones. In June 2019, Broadcom cut its fiscal 2019 revenue forecast to $22.5 billion from $24.5 billion, as CEO Hock Tan pointed to "a broad-based slowdown in the demand environment." Revenue finished the year up 8%. And the stock's 24% rise in 2019 lagged the S&P 500's 29%, so that rebound mainly rode the market.
Fiscal 2023 revenue also rose just 8%. But Tan said that growth came from "investments in accelerators and network connectivity for AI by hyperscalers," and Broadcom forecast around $50 billion in fiscal 2024 revenue with VMware included, up 40%.
The starting price probably helped in both cases. Shares closed 2018 at around 12 times earnings and 2022 at about 15 times earnings, using non-GAAP (adjusted) earnings per share for the fiscal year just ended.
This time, the market isn't the problem
Broadcom's business is growing faster today than in any of those years. Revenue jumped 86% year over year to $29.6 billion in the fiscal third quarter of 2026 (the period ending Aug. 2, 2026), led by artificial intelligence (AI) semiconductor revenue of $16.7 billion, up 221%. Net income climbed 216%. And free cash flow has grown for three straight quarters, from $7.5 billion in fiscal Q4 2025 to $13.7 billion in fiscal Q3.
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