Broadcom Stock Has Had Only 2 Losing Years Since 2009. 2026 Is on Pace to Be the 3rd.

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.

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.

But shares have shed more than a third of their value since closing at a record $481.57 on June 2.

The stock also doesn't start at a cheap price. Shares trade at around 30 times adjusted earnings for the past four reported quarters, at least twice either earlier starting point. On fiscal 2027's expected earnings, though, the price-to-earnings ratio is about 16, which arguably looks fair for a business growing so fast.

Can December's report turn the year around?

Broadcom has said it plans to release its fiscal fourth-quarter results on Wednesday, Dec. 9.

Management guided for fiscal fourth-quarter revenue of about $34.8 billion, up 93% year over year, with $21.7 billion in AI semiconductor revenue.

The bigger test is fiscal 2027, when Broadcom expects AI semiconductor revenue to double to around $115 billion.

"This AI revenue guidance is being provided to you to give you the trajectory of our growth, and we do not intend to update it on a quarterly basis," CFO Amie Thuener said on the Sept. 2 earnings call.

So December's guidance for the fiscal first quarter of 2027 might be the closest check investors get. Hitting $115 billion takes an average of almost $29 billion in AI revenue a quarter, well over the $21.7 billion guided for the fiscal fourth quarter. The December report has also usually brought the annual dividend increase, which was 10% last year.

When I wrote in late September that Broadcom had climbed in 13 straight fourth quarters, shares were around $350. A gain of about 17% from here would continue that streak, and about 15% would keep 2026 out of the loss column.

Ultimately, Broadcom's business looks far stronger now than it did in 2018 or 2022. But this year's drop is Broadcom's own, not the market's, and shares don't start out cheap. Sure, a soft first-quarter outlook may send the stock down before the year ends.

I still think the stock is worth a look at this price. I'd just want to see that outlook before counting on another year like 2023.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom. The Motley Fool has a disclosure policy.