Broadcom (AVGO)

Fabulous company, doing very well in chips. Trades around 30x PE, which hasn't declined like its peers.

It make semis and software and doesn't get enough attention. They sell chips to Alphabet, but they need more clients. They're suffering from the software sell-off, which is wrong. They report Wednesday. A good company, but is too hard to own now.

Macro fears of AI overspending, diminishing returns, circular financing, and bubble worries. Stock-specific fears of a highly competitive market, top 5 customers account for 40% of revenues, high debt levels from past acquisitions may impact future M&A.

Stunning rise since 2022. Unprecedented thirst for products. Acquisitions continue to be a growth driver. Big cashflow, very sustainable dividend. Seven analyst upgrades over last 30 days.

Trades at 23x PE 2027 earnings, growing at 34%.

Trimmed late last year. Still likes and holds. Off highs, but he continues to have a good multi-year outlook. At forefront of AI compute chip innovation. It will shine again.

Is down 100 points from its high. They make quarter after quarter and he expects them to again. They have growth in both software and hardware. They do a lot of work with Google. It's one of the cheaper ways to play AI.

She has started buying this. It will be a prime beneficiary of the shift from GPU's to ASIC's. She avoided this before because it grew from buying companies (doesn't like this approach). but likes its ASIC growth.

Let's look at the 1-year chart -- you can see the peak, a selloff, and now it's drifting. We've had a break, but what's more important is that it's gone below $350 and hasn't gone back above. Technically, that's a problem. We've seen this in other AI stocks. If the supportive lows around $300 fail, then stock's in quite a bit of trouble.

He used to own, but rotated out of this name and into other parts of the market. Definite profit-taking in the AI space. To get in, you need to see it establish support and have evidence that it's moving back up. Wait for confirmation of an upturn.

One of the big 4 semi stocks (Nvidia, ASML, Taiwan Semi). You can own all four. Revenue growth over the last 4 quarters is 24%. Returns are 41%. It pulled back the last quarter after beating, which is a buying opportunity.

A young investor has lots of time ahead. High-risk and volatile choices are acceptable as we move down the AI highway, as long as the investor is OK with the risk. So GOOG and AVGO are great. Let this investor run -- he's having fun and doing well, so let them stay invested.

GE is also good. HON is a bit more of a neutral conversation, but has its own turnaround coming through.

At centre of AI infrastructure buildout. Pullback to a level of strong technical support. Biggest customers provide deep, sticky relationships and long-term demand. AI-related revenue now growing at ~3% annually. AI demand not tied to any single customer or model. Record backlog. Sees 32% upside from here. A full 10/10 on fundamentals. Yield is 0.75%.

Two very clear price points he wanted to watch -- one was $330, the other $320. His team had a long, drawn-out conversation on this one, and decided to use $320. Semis look to have gone through a bit of a flush, and this name sold off on earnings. It's been on the 1-yard line for the last 3 weeks, rallied off it today. 

His hard line in the sand is now $320.

Shares slid since reporting last week, but he's not worried. They reported a healthy top and bottom line beat and gave strong sales and EBITDA guidance. Shares fell only because the CEO mentioned that their AI systems won't consist 100% of their own components. The market was stupid about this. The stock ran up a lot before earnings, so it got slammed. He trusts the CEO who always delivers excellent numbers. Shares are cheap now.

The options market suggests a 9% move for Oracle, but 6% for Broadcom. Oracle has to address their capex---will they do a $35 billion private debt deal which will add to their existing debt? Can enter at $185. Broadcom has more opportunity, given more customers for their chips and their existing relationship with Alphabet. Their PE is a little high, but they will benefit from a pivot away from Nvidia to other chips. AVGO has a tremendous growth opportunity, currently at only 9% of market share vs. NVDA's dominance if there is a market pivot, which he feels is happening.