Stock price when the opinion was issued
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.
It sold off after last Thursday's report: revenues +2-% YOY, EPS +44% YOY with semis and infrastructure software numbers also impressing. Also, guidance was healthy. However, shares ran up before that report, their non-AI semis business disappointed and guidance says it will be slow to recover. Also, AVGO didn't comment on current or prospective cuctoemrs. Gross margins for Q2 were in-line, but guidance was weak. He still likes the stock: AI semis revenues beat and are expected to grow next quarter from $4.4 to $5.1 billion. Their networking side is also growing.
One of the things his team's looking at right now is that it seems some of the regulations surrounding the semiconductor industry will be reduced (specifically China, but other countries as well). That could mean an expanded market for the semi manufacturing equipment companies, such as KLAC. AVGO has also been a strong performer, and he owns some NVDA. Those two names have strong relative price performance, are economically sensitive, cyclical, and have pricing power.
The latest move on the chart is parabolic, it's moved too high. Draw a simple trendline, and you can see that it's way off. Also look at the 200-day MA, and if it's 15+% over, you know it's overbought. Highly likely to pull back.
Though he would need his more sophisticated office software to be super-accurate, he could see it easily falling to $200-210.