Broadcom (AVGO-Q)

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.

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

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.

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

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.

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

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. 

Leader. Increasingly into AI chips; recent announcement of 3-nanometer chip puts it on par with NVDA. Yield is 1%, with good 25% pace of growth over last 10 years and good scope to continue. Earnings poised to grow 22% over coming 3 years.

Terrific fundamentals: 38% free cash flow margins and 64% operating margins. A key holding for him. They're in the midst of a secular growth opportunity in AI.

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.

Really large footprint in a niche area of AI, which will provide better growth than an NVDA (whose growth is starting to slow). Building up AI infrastructure and cost efficiency. Valuation is great. The CDR hedges against the CAD moving up from its very low level now. Yield is 1.2%.

They report Thursday. Shares tend to run up before the report, then sell off after. He expects the same. Buy on dips, aggressively.

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.

Concerns about how much capital the cloud companies are spending on chips, scaling might be hitting a wall. Should be more clarity on that in next 6-12 months. Don't chase.

It should do well, though he doesn't know if Cisco's light guidance today will hurt it.