Broadcom Inc. (AVGO) vs Seagate Technology Holdings plc (STX): Which Is the Better Buy in 2026?
As of 2026-11-01, AVGO is overvalued at $326, with a DCF intrinsic value of $259 and a margin of safety of -26%. STX is undervalued at $645, with an intrinsic value of $1047 and a margin of safety of 38%. Of the two, STX has the wider margin of safety.
Rewards
- ★Gross margin of 75.5% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Free cash flow has grown at a 18.2% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★Each dollar of retained earnings has created $11.66 of earning power — management is an exceptional capital allocator.
- ★Free cash flow has grown at a 70.5% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★Each dollar of retained earnings has created $12.33 of earning power — management is an exceptional capital allocator.
- ★Trailing P/E of 33.8x is 27% below the historical average of 46.0x — potentially undervalued relative to its own history.
Risks
- ⚠ROIC has declined by 6.5 percentage points over the past 4 years, which may signal competitive erosion.
- ⚠Share count has increased by 13% over the past 4 years, diluting existing shareholders.
- ⚠FCF yield of 2.0% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠FCF yield of 2.1% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠28 insider sales totaling $326.3M with no purchases in the past 3 months — insiders are reducing their exposure.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $326?
The market implies +20.4% Owner Earnings growth, roughly in line with history — reasonably priced.
Standard FCF implies +20.8%, reflecting ongoing growth investment.
What growth rate is the market pricing in at $645?
The market implies +19.3% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +19.7%, reflecting heavy growth investment expected to generate future returns.
Economic Moat Score
Learn more →Narrow moat with reinvestment efficiency as the key competitive advantage. Improving revenue predictability would strengthen the moat.
Narrow moat with reinvestment efficiency as the key competitive advantage. Improving margin stability would strengthen the moat.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pessimistic — investigate whether fears are temporary or structural"
"Market is pessimistic — investigate whether fears are temporary or structural"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: AVGO vs STX
Is Broadcom Inc. or Seagate Technology Holdings plc more undervalued in 2026?▼
Based on our discounted cash flow model, STX trades at a 38.5% margin of safety (intrinsic value $1047 vs. price $645), compared to AVGO's -25.8% margin of safety (intrinsic $259 vs. $326).
Which stock has a wider economic moat, Broadcom Inc. or Seagate Technology Holdings plc?▼
AVGO scores 61/100 (Narrow moat), while STX scores 41/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Which company has better free cash flow, Broadcom Inc. or Seagate Technology Holdings plc?▼
Seagate Technology Holdings plc (STX) generates a 2.1% free cash flow yield, compared to Broadcom Inc.'s 2.0%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Broadcom Inc. or Seagate Technology Holdings plc?▼
STX earns 86.9% ROIC versus AVGO's 24.0%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Broadcom Inc.'s or Seagate Technology Holdings plc's?▼
AVGO's dividend earns a safety score of 94/100 (Very Safe), compared to STX's 85/100 (Very Safe). AVGO has raised its dividend for 3 consecutive years.