In the dynamic world of semiconductors, two industry giants stand out: Broadcom Inc. (AVGO) and Texas Instruments Incorporated (TXN). Both companies are pivotal in shaping technology infrastructure, yet they have distinct approaches to innovation and market strategy. As they navigate the evolving landscape of electronic components, their competitive edge and growth potential present intriguing opportunities for investors. Join me as we explore which of these companies could be the most compelling addition to your investment portfolio.
Table of contents
Company Overview
Broadcom Inc. Overview
Broadcom Inc. (AVGO) is a leading global technology company based in San Jose, California, that specializes in designing, developing, and supplying semiconductor and infrastructure software solutions. With a workforce of approximately 37,000 employees, Broadcom operates through four key segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other. The company’s extensive product portfolio caters to various end markets, including telecommunications, data center networking, and electronic displays. Broadcom’s mission is to enable customers to thrive in a highly connected world by providing innovative technology solutions that improve the performance and efficiency of electronic devices.
Texas Instruments Incorporated Overview
Texas Instruments Incorporated (TXN), headquartered in Dallas, Texas, has a rich history dating back to 1930 and is recognized for its design and manufacturing of semiconductors. The company operates primarily in two segments: Analog and Embedded Processing. Texas Instruments focuses on delivering power management solutions and microcontrollers that meet diverse industry needs, from automotive to personal electronics. With around 34,000 employees, its mission is to empower engineers and designers worldwide with advanced semiconductor solutions that drive innovation and enhance productivity.
Key similarities and differences
Both Broadcom and Texas Instruments operate within the semiconductor industry and emphasize innovation in technology solutions. However, their business models differ; Broadcom focuses more on infrastructure software alongside its semiconductor products, while Texas Instruments primarily emphasizes analog and embedded processing products. This distinction highlights Broadcom’s broader scope in software solutions compared to Texas Instruments’ focus on hardware-centric applications.
Income Statement Comparison
Below is a comparative overview of the income statements for Broadcom Inc. (AVGO) and Texas Instruments Incorporated (TXN) for their most recent fiscal years.
| Metric | Broadcom Inc. | Texas Instruments |
|---|---|---|
| Market Cap | 1.69T | 163.05B |
| Revenue | 63.89B | 15.64B |
| EBITDA | 35.49B | 7.54B |
| EBIT | 25.48B | 5.96B |
| Net Income | 23.13B | 4.80B |
| EPS | 4.91 | 5.24 |
| Fiscal Year | 2025 | 2024 |
Interpretation of Income Statement
In the most recent fiscal year, Broadcom experienced a significant revenue increase, climbing to 63.89B, reflecting robust demand in the semiconductor sector. Texas Instruments, however, reported a decline in revenue to 15.64B, indicating potential challenges in market demand or pricing pressures. Broadcom’s EBITDA margin improved, showcasing effective cost management, while Texas Instruments faced stable margins despite lower revenue. The contrasting performance suggests that while Broadcom is capitalizing on growth opportunities, Texas Instruments may need to reassess its strategic positioning to regain momentum.
Financial Ratios Comparison
The following table provides a comparative overview of the most recent financial ratios for Broadcom Inc. (AVGO) and Texas Instruments Incorporated (TXN) to help guide your investment decisions.
| Metric | Broadcom Inc. (AVGO) | Texas Instruments (TXN) |
|---|---|---|
| ROE | 28.45% | 28.39% |
| ROIC | 16.65% | 14.75% |
| P/E | 73.87 | 35.63 |
| P/B | 21.01 | 10.12 |
| Current Ratio | 1.71 | 4.12 |
| Quick Ratio | 1.58 | 2.88 |
| D/E | 0.80 | 0.80 |
| Debt-to-Assets | 38.07% | 34.69% |
| Interest Coverage | 7.94 | 10.76 |
| Asset Turnover | 0.37 | 0.54 |
| Fixed Asset Turnover | 25.25 | 1.38 |
| Payout ratio | 48.18% | 99.92% |
| Dividend yield | 0.65% | 2.90% |
Interpretation of Financial Ratios
Broadcom displays solid return metrics with a robust ROE of 28.45%, indicating effective capital use. However, its high P/E ratio of 73.87 raises concerns about potential overvaluation. Texas Instruments, while slightly lower in ROE at 28.39%, maintains stronger liquidity ratios and a more attractive dividend yield of 2.90%. However, its high payout ratio signals potential sustainability risks for future dividends. Overall, both companies have strengths and weaknesses, and careful consideration of these ratios is essential for sound investment decisions.
Dividend and Shareholder Returns
Broadcom Inc. (AVGO) maintains a dividend payout ratio of approximately 48%, offering a dividend yield of 0.65%. Their consistent dividends are supported by robust free cash flow, although there’s a risk of unsustainable distributions. Texas Instruments (TXN) also pays dividends with a payout ratio nearing 70% and a yield of 2.94%. Both companies engage in share buybacks, reinforcing shareholder value. Overall, their distributions appear conducive to long-term value creation, albeit with careful monitoring needed.
Strategic Positioning
In the semiconductor industry, Broadcom Inc. (AVGO) commands a substantial market share with its diverse product offerings across various segments, including wired infrastructure and wireless communications. With a market cap of approximately $1.69T, it faces significant competitive pressure from Texas Instruments (TXN), which specializes in analog and embedded processing solutions and has a market cap of around $163B. Both companies are navigating technological disruptions, particularly in AI and IoT, which challenge traditional product lines and require ongoing innovation to maintain their competitive edge.
Stock Comparison
In this section, I will analyze the weekly stock price movements and trading dynamics of Broadcom Inc. (AVGO) and Texas Instruments Incorporated (TXN) over the past year, highlighting key price fluctuations and trends.
Trend Analysis
For Broadcom Inc. (AVGO), the stock has demonstrated a remarkable price change of +197.17% over the past year, indicating a bullish trend. The stock has experienced notable highs of $402.96 and lows of $120.47, with acceleration in its upward movement. The standard deviation of 76.27 suggests a high level of volatility in its price movements.
Recently, from September 28, 2025, to December 14, 2025, AVGO recorded a positive change of +7.59%, reinforcing its bullish trend with an upward slope of 4.17. However, the standard deviation of 22.05 indicates some volatility in this shorter timeframe.
In contrast, Texas Instruments Incorporated (TXN) has seen a price change of +3.32% over the past year, which also reflects a bullish trend, albeit with a trend status of deceleration. The stock’s price has fluctuated between a high of $221.25 and a low of $147.60, with a lower standard deviation of 16.64, indicating less volatility compared to AVGO.
However, in the recent period from September 28, 2025, to December 14, 2025, TXN experienced a slight decline of -2.78%, which places it in a neutral trend. The trend slope of -0.62 suggests a potential weakening in momentum during this timeframe. The standard deviation of 9.07 indicates a lower level of volatility relative to AVGO.
In summary, while both stocks are currently showing bullish trends over the longer term, AVGO is demonstrating stronger momentum and higher volatility compared to TXN, which is experiencing signs of deceleration in its price movement.
Analyst Opinions
Recent analyst recommendations for Broadcom Inc. (AVGO) and Texas Instruments Incorporated (TXN) both indicate a “Buy” rating, reflecting a consensus among analysts. Analysts have highlighted Broadcom’s strong return on equity and assets, which scored 5, while TXN shares similar strengths. Both companies received overall scores of 3, with analysts like those from S&P Global suggesting that their robust fundamentals and growth potential justify a positive outlook. As of 2025, the consensus remains a “Buy” for both stocks, indicating confidence in their future performance.
Stock Grades
In the current market landscape, stock ratings from reputable firms provide valuable insights for investors. Here’s a breakdown of the recent grades for Broadcom Inc. and Texas Instruments Incorporated.
Broadcom Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Piper Sandler | maintain | Overweight | 2025-12-12 |
| Citigroup | maintain | Buy | 2025-12-12 |
| TD Cowen | maintain | Buy | 2025-12-12 |
| Mizuho | maintain | Outperform | 2025-12-12 |
| Barclays | maintain | Overweight | 2025-12-12 |
| Morgan Stanley | maintain | Overweight | 2025-12-12 |
| B of A Securities | maintain | Buy | 2025-12-12 |
| JP Morgan | maintain | Overweight | 2025-12-12 |
| Benchmark | maintain | Buy | 2025-12-12 |
| Oppenheimer | maintain | Outperform | 2025-12-12 |
Texas Instruments Incorporated Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Susquehanna | maintain | Positive | 2025-10-22 |
| Wells Fargo | maintain | Equal Weight | 2025-10-22 |
| Truist Securities | maintain | Hold | 2025-10-22 |
| Rosenblatt | maintain | Buy | 2025-10-22 |
| Goldman Sachs | maintain | Buy | 2025-10-22 |
| JP Morgan | maintain | Overweight | 2025-10-22 |
| Cantor Fitzgerald | maintain | Neutral | 2025-10-22 |
| Stifel | maintain | Hold | 2025-10-22 |
| TD Cowen | maintain | Buy | 2025-10-22 |
| Mizuho | downgrade | Underperform | 2025-10-20 |
The overall trend indicates a strong sentiment towards Broadcom with multiple “Buy” and “Overweight” ratings. Texas Instruments shows a mixed sentiment with consistent “Buy” ratings but a recent downgrade from Mizuho, suggesting some caution is warranted.
Target Prices
The consensus target prices from analysts for the selected companies are as follows:
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Broadcom Inc. (AVGO) | 500 | 400 | 452.93 |
| Texas Instruments (TXN) | 245 | 145 | 190.45 |
For Broadcom Inc. (AVGO), the target consensus of 452.93 suggests positive expectations, while its current price of 359.90 indicates a potential upside. Texas Instruments (TXN) also shows favorable analyst sentiment with a target consensus of 190.45 compared to its current price of 179.45, presenting a similar upside opportunity.
Strengths and Weaknesses
The following table outlines the strengths and weaknesses of Broadcom Inc. (AVGO) and Texas Instruments Incorporated (TXN).
| Criterion | Broadcom Inc. (AVGO) | Texas Instruments (TXN) |
|---|---|---|
| Diversification | High | Moderate |
| Profitability | High (36% net margin) | High (37% net margin) |
| Innovation | Strong | Moderate |
| Global presence | Extensive | Strong |
| Market Share | Leading | Strong |
| Debt level | Moderate (0.80) | Low (0.66) |
Key takeaways show that both companies are highly profitable with strong market presence, but Broadcom has a slightly higher level of debt, while Texas Instruments exhibits strong innovation in its product offerings.
Risk Analysis
The following table outlines key risks associated with Broadcom Inc. (AVGO) and Texas Instruments Incorporated (TXN).
| Metric | Broadcom Inc. (AVGO) | Texas Instruments (TXN) |
|---|---|---|
| Market Risk | High | Moderate |
| Regulatory Risk | Moderate | Low |
| Operational Risk | Moderate | Moderate |
| Environmental Risk | Low | Moderate |
| Geopolitical Risk | High | Moderate |
Both companies face significant market and geopolitical risks, particularly due to industry volatility and global supply chain disruptions. As semiconductor demand fluctuates, these factors could adversely impact their performance.
Which one to choose?
In comparing Broadcom Inc. (AVGO) and Texas Instruments Incorporated (TXN), both companies exhibit solid fundamentals, with a “B” rating for overall performance. AVGO has a higher gross profit margin of 68% compared to TXN’s 58%, indicating better profitability per dollar of revenue. However, TXN boasts a significantly lower price-to-earnings ratio of 24 versus AVGO’s 73, suggesting it may be undervalued relative to its earnings potential.
AVGO has shown a bullish stock trend with a 197% price increase over the past year, while TXN shows a more modest 3% increase, indicating more volatility and potential for higher returns with AVGO. Analysts remain cautiously optimistic about both, but risk factors such as competition and market dependence persist.
Recommendation: Growth-oriented investors may find AVGO appealing, while those valuing stability and lower valuation may lean towards TXN.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Broadcom Inc. and Texas Instruments Incorporated to enhance your investment decisions:
