Which Tech Giant is the Most Valued? Broadcom's AI Revenue Soars 221% but Valuation is the Lowest

Future Fund managing partner Gary Black has been consistently increasing his stake in one of his most favored stocks and urging investors to reassess the valuation metrics of the 'Mag 8' tech giants, a group that includes the 'Tech Seven' and another major tech company.

Broadcom (AVGO-US) saw its stock price decline after releasing its quarterly financial report, pushing its valuation below that of the Tech Seven.

Black stated that, when measuring the 2026 price-to-earnings ratio relative to the future long-term earnings per share growth rate, or the price-to-earnings growth ratio (PEG), Broadcom is the lowest-valued stock among the Mag 8, with a PEG of just 0.9 times.

In contrast, Tesla (TSLA-US) has a PEG of 4.8 times, making it the highest-valued stock among the eight. NVIDIA (NVDA-US) has been the best-performing component stock this year, with a PEG of just 1.1 times, while Tesla, with its high PEG, has been the worst-performing stock in the Mag 8.

Strong AI revenue supports stock price

After Broadcom released its third-quarter financial report and its stock price fell, Black recently spoke out in support. He believes that as investors become more aware of Broadcom's strong AI-related revenue performance, the stock price is expected to recover some of its losses.

Black stated, 'As investors become more aware of the strong performance of AI revenue, I expect the stock price to experience a certain degree of recovery.'

He also cited Broadcom CEO Hock Tan's statement that current demand for AI chips has exceeded the company's ability to deliver.

Broadcom's third-quarter AI revenue reached $167 billion, up 221% year-over-year, exceeding Wall Street's estimate of $159 billion. The company estimates that fourth-quarter AI revenue will reach $217 billion, up 236% year-over-year, also exceeding market expectations of $213 billion.

Broadcom currently estimates that AI revenue for the fiscal year 2026 will reach $580 billion, higher than the previous estimate of $560 billion, representing a 186% increase over the previous year.

Broadcom's stock price closed at $367.24 on September 2, the day the third-quarter financial report was released, and opened at $351.74 the next morning. After more than a week, the stock price has partially recovered to $361.12, although it is higher than the opening price the day after the financial report was released, it is still lower than the level before the financial report was released.

If measured by profit forecasts, Broadcom's current valuation is lower than that of other Mag 8 component stocks. The stock price decline after the financial report may also make it continue to be a target that investors can consider.