Stockchase Opinions

John Zechner Broadcom AVGO-Q DON'T BUY Dec 02, 2024

Product offerings in different industries helps them. Out of total $50B sales, $12B is from AI -- great, but they need to pick up the pace a bit. Concerned about semis in general; SMH ETF has not recovered from July peak the way the rest of tech has.

AI infrastructure chips may escape semiconductor cyclicality, but AVGO is not yet a dominant player in this area.

$166.790

Stock price when the opinion was issued

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WAIT

Shares tanked today on news of China's DeepSeek stealing the AI crown from ChatGPT--DeepSeek is faster and cheaper. All AI-related stocks, including energy plummeted as the Nasdaq slid over 3%. He sold his shares already, but if the stock stabilizes, this may be a buy, because AVGO has a lot of business away from AI-related data centres. However, he doesn't know--this could fall further. It's a confusing situation that happened so suddenly that you have to sit on your hands and wait. 

BUY

Hold on, and add to your position. $238, still some decent runway. He bought some on Monday and Tuesday.

BUY

There's still clear demand for network processors, and AVGO leads here. Capital has moved out of this area into software, but there is opportunity in AVGO.

BUY

She added more. It's essential for integrating data centres. It's a growth story equal to Nvidia.

BUY ON WEAKNESS

She added more, despite the pain, down 20% from highs. Doesn't like the valuation, but likes the diversification of revenues, not just data centres but also software. She will buy on the way down.

PAST TOP PICK
(A Top Pick Apr 24/24, Up 44%)

(Stock split on 15 July 2024.)  Up $11 today, with a good runway to its price target of $273.25.

BUY ON WEAKNESS

Having data centres in different regions is going to be increasingly important. AI is real, but absolutely ahead of itself. Phenomenal CEO. Up 30% YTD makes him choke on valuation. Best of breed tends to get a premium multiple. May get an opportunity to buy on a dip if we see some weak news coming out of the US.

HOLD

Clearly isn't going to topple NVDA from the throne on which it finds itself. Every time someone thinks they can do that, NVDA comes out with a new version of the chip that's even better. This name isn't a bad alternative play to NVDA.

BUY

It reports Thursday. He expects it to be great, because software is getting great margins.

BUY

Big pullback in April. Pushing out to new all-time highs, quite positive. Long-term chart looks fantastic. Great name. Definitely doesn't mind adding at these levels. Looks technically strong, and in the right place as semis have really started to strengthen and lead the market higher again.