Broadcom (AVGO)

He thought their Sept. 5 report was terrific, but AI revenues came in a little light so shares plunged 10%. Ridiculous. Then last week, positive announcements came from Nvidia and Oracle, so all semis rallied, including AVGO by 22%. He owns a large position.

Most important thing to know about semiconductor stocks, AI, and technology: it's exciting at the time, but there are going to be cyclical downturns. So there's going to be a pullback in capital expenditures in the space. Hard to tell when that's going to happen.

Pretty strong chart, with stock price well above the 200-day MA. Higher highs and higher lows. Not overly expensive compared to a lot of tech names out there. Trades around 27-28x earnings, 16-17% growth rate. Forward price to sales is up there at 13x. PEG ratio is 2x. 

Need to be very selective in which names you want to own. There are some tech names trading at a PEG of 1x. Starting to see divergence in valuation. We're getting later in the game to be overly exuberant about technology because earnings are now broadening out beyond tech.

They reported a decent quarter. Is down 23% and sitting on its 100-day moving average.

Their PE rose to 30x (like Nvidia) on the AI trade, but AI is only a small part of their business. AVGO did see 47% earnings growth, but that's a third of NVDA's.

He just bought more despite today's sell-off to take advantage of the dip. The quarter, just reported, was pretty good, though guidance was squishy. They said they would invest $12 billion in AI, though their legacy business has slowed down. 

She added more AVGO. Could be volatile, but was encouraged by Marvell's latest report in which AI was very strong for them, and their non-cyclical business had bottomed and was improving. AVGO's AI business is firing on all cylinders and trades cheaply.

Owned this since 2017. One of the best managers in tech. He trimmed shares the last 2 months. In the past 2 years, the PE has jumped from around 15x to 30x, but there are higher growth expectations from their chips. They benefit from AI and and networking spend as they buy software companies. Free cash flow keeps growing and pays a nice dividend.

Very successful A.I. play. Stock has tripled over the past year, so valuation is very high right now. Would recommend investors wait before investing. Very strong tech stack, but also has services side of business. Would look for cheaper A.I. options in the markets. 

His recommendation in the semiconductor space.

12-month price target of $193.60. He's been adding as it comes down. Closest competitor to NVDA. Deep pockets, ability to scale. 75% of revenue is in semis, 25% in infrastructure software. Beneficiary of US government $$ giveaway.

A secular grower that grows its dividend reliably.

Is up 47% this year and he's sold a third of his holdings after making big gains. Still trades at a reasonable PE. It's central to AI infrastructure.

She prefers QCOM as a long-term hold, as it's 9/10 on fundamentals, and the pullback in QCOM presents a great entry point.

He expects this to top $1 trillion. AVGO is a little overlooked. It connects Nvidia's chips to the world's networks. Data centres and AI can't work without AVGO. It's starting to integrate VMware, which they bought, and its other businesses will benefit from the new cycle of cell phone-buying. It will split 10-for-1 on Monday, but is wary of the churn that typically happens after a split.

He has owned it for quite a while and would still buy it. They have a 3 1/2% position which they probably bought at 2%. If it goes up he sells some and then buys it back. It is very well managed and takes out competitors. AI is the number 1 player in Broadcom's communication. It is expensive.