Broadcom and Applied Materials both generate cash and repurchase shares, but shareholders ultimately own a fraction of a business. Our 10 Best Semiconductor Stocks to Buy for the Next Decade makes that distinction important: buyback spending is useful only in the context of issuance, the price paid and the cash needed to sustain growth. Broadcom Inc. (NASDAQ:AVGO) offers custom silicon, networking and software exposure. Applied Materials, Inc. (NASDAQ:AMAT) sells semiconductor-manufacturing equipment and services. They are different routes into AI-related investment, compared here on shareholder participation in cash growth.
Close-up of Silicon Die are being Extracted from Semiconductor Wafer and Attached to Substrate by Pick and Place Machine. Computer Chip Manufacturing at Fab. Semiconductor Packaging Process.
A repurchase bill is not a net reduction
Broadcom spent $8.450 billion on repurchases over its first nine fiscal months. Yet weighted-average basic shares rose from 4.705 billion to 4.752 billion year over year, about 1.0%. Applied spent $1.177 billion over its first nine fiscal months, while weighted-average basic shares fell from 807 million to 794 million, about 1.6%.
The fiscal periods also differ slightly. They nevertheless show why dividing repurchases by market capitalization can overstate the ownership benefit: issuance and timing affect the actual denominator.
Applied delivered the more favorable net share-count direction in these reported periods. That does not prove its repurchases created more value. Buying overvalued shares can destroy value even when the number outstanding falls. Our Lam-Applied cash-coverage comparison tests a different prerequisite: whether payouts were supported by cash after investment.
Cash compensation and stock compensation both matter
Broadcom reported $6.287 billion of stock-based compensation in the nine-month cash-flow reconciliation; Applied reported $545 million. Stock compensation is added back in operating cash flow because it is noncash in that period, but it can dilute shareholders or require repurchases to offset issuance. It should not be mistaken for a costless source of cash.
Their nine-month operating cash after direct capital expenditure was $31.937 billion and $3.580 billion. As a conservative accounting-cost sensitivity, subtracting reported stock compensation leaves $25.650 billion and $3.035 billion. This is not GAAP cash flow or the cash actually needed to neutralize dilution; grant values, vesting and future repurchase prices differ.
The per-share hurdle
If company-wide cash grew 10% while shares increased 1%, cash per share would rise about 8.9%. With shares falling 1.6%, the same cash growth would produce about 11.8% per-share growth.
At October 16 equity values, trailing cash after capital spending cost about 40 times for Broadcom and 58 times for Applied. Broadcom’s lower multiple and stronger cash generation can outweigh modest dilution, while Applied’s shrinking denominator cannot alone justify its price.
For investors weighing the chip-design alternative, our Nvidia-Broadcom comparison connects the cash-flow price with the growth assumptions behind each business.
Q2 2026 hedge-fund holders fell to 170 from 173 for Broadcom and to 137 from 138 for Applied. Fisher increased Broadcom shares 3%; Coatue reduced Applied shares 20%. Broadcom’s September 30 short interest was 1.16% of float.
Applied currently shows the better net share-count direction. The lasting investment test is cash growth per share after competitive reinvestment, rather than the largest repurchase announcement or the smallest stock-compensation adjustment.
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