Broadcom (AVGO)

Very strong results yesterday, especially from AI chips. 10-for-1 stock split improves sentiment in short term. Great, high-quality name. Don't chase, wait for a pullback. Viable alternative to NVDA, but all have done so well, you need to wait.

Note that growth can still be positive, but once the rate itself slows, all these stocks will come down.

They just reported great numbers. It's a large holding of his. They make equipment for data centres

It reports Wednesday and she expects their AI business to be strong and VMware will make a bigger contribution. Software will total 40% of total revenues, positive for gross margins.

Massive company. 12-month price target of $1573. 3/4 revenue from semiconductors, 1/4 from infrastructure software. So very diversified. Yield is 1.7%.

Great, diversified name. #2 player, in dollar terms, in AI semiconductors after NVDA. Partners directly with companies to design company-specific chips. Doesn't see any thesis breakdown on the horizon.

Good to own given AI adoption, rising demand for data centres and cloud computing. AVGO fundamentals are excellent.

It has pulled back over the past few weeks. It has exposure to AI GPU chips along with a good portfolio of other types of chips. This gives it diversification and exposure to other chip cycles. It also grows its dividend.

Is the reasonable alternative to the higher-PE semis stocks. AVGO shares have pulled back and not recovered yet. He expects a catalyst today. This isn't a growth company.

A longtime, key holding of his. They make chip for data centres. He's been trimming as shares have risen. The stock could double from here.

He took some profits right before they reported (shares are down today despite them beating). Loves the company for its diversification and still holds a small position. Revenue expectations had exploded from $38 billion to $50 billion. At 10x sales, that's a $1,300 share, but historically it trades 7x and $900. There should be an AI premium, but the stock now is fairly priced. Shares are up 51% in 3 months, so he took profits. He would buy them back on a pullback at $900, where it should be.

He's not negative on it, but long and he will trim a few shares today. AVGO is growing into its role as an AI networking company, with 15% exposure to AI. Other businesses, said the CEO, will grow revenues by 35%. Last time they reported, shares fell 4%. Yes, some businesses are glaringly weak. The market is getting ahead of non-Nvidia AI stocks.

She trimmed her holdings a month ago and felt foolish as the price kept rising, but remains a big believer in AVGO. Shares are up 51% in the last 3 months, so expectations are really high, and from 16x forward PE to 25x (2023-4). But it should be around that multiple, because their AI business is only starting, from $7.5 billion to $10 billion (2023-4). Problem is, AVGO didn't raise numbers across all their businesses, some of which are troughing. Software is a home run, though. Share are falling despite beating in their report, but they needed to crush numbers. They've been transitioning from more hardware to more software, which boasts higher margins. she expects double-digit revenue growth.

The CEO is a master at buying companies, milking them and fund the next big acquisition or sell another division.

Up 51% since Nov. 1. Any position that rises 5%, he will trim as part of his portfolio management. Will also trim MSFT which as climbed 24% in this time. However, AVGO is a small position that he's recently added, so he won't sell it yet.