Broadcom just put up one of the most impressive quarters in its history. And the numbers tell a story that income investors can’t afford to ignore.
The semiconductor and infrastructure software giant posted record first-quarter fiscal 2026 revenue of $19.3 billion, up 29% year over year, and generated a record $13.1 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
That’s a 68% EBITDA margin. For context, most companies would kill for a 20% margin.
But here’s what dividend investors should really be paying attention to: Broadcom (AVGO) returned $10.9 billion to shareholders in a single quarter. That included $3.1 billion in cash dividends and $7.8 billion in share repurchases.
On an annualized basis, the company pays out more than $12 billion in dividends to investors each year — a figure that’s only growing.
Broadcom’s dividend at a glance
According to data from Fiscal.ai, AVGO stock has increased its annual dividend from $0.18 per share in 2016 to $2.60 per share in 2026, indicating an annual growth of more than 30%.
Broadcom is forecast to expand its free cash flow from $49 billion in fiscal 2026 (ending in October) to $127 billion in fiscal 2030.
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If AVGO stock maintains a payout ratio of even 20%, its annual dividend could double over the next four years.
For dividend investors, here are the key numbers to know.
- Annual dividend per share: $2.60
- Quarterly dividend per share: $0.65
- Current dividend yield: Approximately 0.80%
- Payout ratio: Approximately 25% of FCF
- 10-year dividend growth rate: Approximately 30.9%
- Total dividends paid in Q1 fiscal 2026: $3.1 billion
- Annualized dividend payout: More than $12 billion
A sub-1% yield might not scream “income stock” at first glance. But dig into the growth rate, and it becomes clear why Broadcom belongs in a different conversation.
Investors who bought shares five years ago and held them are now collecting a yield on cost far above what they initially anticipated. That’s the power of consistent, aggressive dividend growth.
The 25% payout ratio is also worth highlighting. It signals that Broadcom has plenty of room to keep raising the dividend, even if earnings growth slows.
Broadcom’s AI business widens
The fuel behind Broadcom’s massive shareholder returns is its artificial intelligence semiconductor business.
- AI chip revenue hit $8.4 billion in the first quarter, up 106% year over year.
- For the second quarter of fiscal 2026, CEO Hock Tan guided AI semiconductor revenue to $10.7 billion, representing 140% year-over-year growth.
Broadcom designs custom AI accelerators, known as XPUs, for six major customers, including Google, Anthropic, Meta, and OpenAI.
These are multi-year, strategic partnerships backed by supply agreements locked in through 2028.
Tan dropped a jaw-dropping figure on the earnings call.
That kind of revenue trajectory is exactly what gives Broadcom the cash firepower to keep growing its dividend year after year.
On top of the dividend, Broadcom’s board authorized an additional $10 billion share repurchase program through the end of calendar year 2026.
Fewer shares outstanding means each remaining share gets a bigger slice of future earnings and dividends.
Together, buybacks and dividends create a powerful compounding engine for long-term shareholders.
What Broadcom does, and why it matters
Broadcom is more than an AI chip company. It operates in two segments.
The Semiconductor Solutions segment designs and supplies custom AI accelerators, Ethernet networking chips, wireless components, storage solutions, and broadband technology.
Related: Broadcom could sustain its eye-popping 2026 dividend hike
These chips power everything from AI data centers to smartphones to cable boxes.
The Infrastructure Software segment, which generated $6.8 billion in first-quarter revenue, centers on VMware Cloud Foundation.
- VMware integrates CPUs, GPUs, storage, and networking into a unified environment.
- Tan argued that as AI workloads grow, demand for VMware will grow with them.
- That software business carries a staggering 93% gross margin.
Together, the two segments give Broadcom a rare combination: explosive AI-driven growth on one side and a steady, high-margin software cash engine on the other.
What’s next for AVGO stock price
Broadcom guided for second-quarter 2026 consolidated revenue of approximately $22 billion, up 47% year over year, with EBITDA margins holding steady at 68%.
Wall Street estimates adjusted earnings to expand from $6.82 per share in fiscal 2025 to $25.44 in fiscal 2030.
If AVGO stock is priced at 24.7x forward earnings, which is similar to its current multiple, it could almost double over the next three years.
Out of the 29 analysts covering Broadcom stock, 29 recommend “buy” and two recommend “hold.”
The average AVGO stock price target is $461, indicating an upside potential of 40% from current levels.
Broadcom offers a unique proposition for investors seeking exposure to the AI buildout without betting on a single hyperscaler.
It sits at the center of the action, collecting revenue from multiple AI heavyweights simultaneously, while writing dividend checks that keep getting bigger.
The numbers back it up. The supply chain is locked in. The customers are committed.
