Will Broadcom’s DISA cloud deal and AI push change the bullish picture for AVGO?

• In March 2026, Broadcom and Carahsoft announced a five-year, $970 million bulk purchase agreement with the Defense Information Systems Agency to streamline acquisition of private cloud, security, and other VMware by Broadcom software across key U.S. Department of the Army agencies.
• In addition to this government win, Broadcom launched the Symantec CBX cloud cybersecurity platform, highlighting the tremendous growth in AI semiconductor revenue and highlighting how AI hardware and software are increasingly intertwined with its business.
• Next, we consider how this DISA software deal could impact Broadcom’s AI-focused investment story and perception of long-term profitability.

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Broadcom Investment Story Summary

To own Broadcom, you need to believe that the company’s AI semiconductor leadership and VMware-led software shift can continue to drive revenue even higher despite customer concentration and heavy debt. The new $970 million DISA blanket purchase agreement strengthens VMware’s part of that story, but it doesn’t directly change the biggest near-term variable: how aggressively a small number of hyperscalers will continue to spend on custom AI chips.

Among recent announcements, the launch of the Symantec CBX cloud cybersecurity platform stands out here. This signals that Broadcom is looking to build a broader, recurring software and security revenue base alongside VMware, which could modestly offset the risk of cooling demand for AI chips and support the long-term earnings story that many investors are focused on.

But behind the optimism around AI and government contracts, there is one concentration risk in particular that investors should be aware of.

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The Broadcom story projects revenue of $119.6 billion and profits of $50.8 billion by 2028.

Find out how Broadcom’s projections resulted in a fair value of $472.01, which is 51% higher than the current price.

explore other perspectives

Consensus is for revenue to grow around 27% annually, but the most pessimistic analysts see revenue rising closer to 19% by 2028 at $42.4 billion, a reminder that views on Broadcom’s hyperscaler dependence and AI durability can vary widely and may change again as this new DISA deal and VMware’s advances take full effect.

Check out 34 other fair value estimates for Broadcom – why its stock is only worth $300.91!

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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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