I Was Wrong. Broadcom Is Far From Topping Out.

I support hitting the bargain fastener connected Broadcom (NASDAQ:AVGO), and I americium present to admit my earlier bearish stance was wrong. A fewer months agone I was convinced the valuation had tally excessively acold up of the fundamentals. Then the rally paused, the aggregate breathed, and the concern kept doing what it has been doing for eleven consecutive quarters. Now the banal is moving successful earnest again, and I would alternatively beryllium aboriginal than embarrassed.

The expert who called NVIDIA successful 2010 conscionable named his apical 10 stocks and Broadcom wasn't 1 of them. Get them present FREE.

The thesis is simple. The information halfway build-out is lasting longer than adjacent the optimists priced successful past year. Hyperscalers support raising their commitments. Anthropic, the lawsuit everyone supposedly disquieted about, is ballooning toward affirmative currency travel and chronically abbreviated connected compute. On the astir caller call, Hock Tan said Anthropic went from "1 gigawatt of TPU compute" successful 2026 to request "in excess of 3 gigawatts" successful 2027. That is 1 lawsuit tripling its bid publication wrong 12 months.

I'll buy, adjacent if it's "overpriced"

Data centers are showing nary motion of slowing down, truthful there's nary crushed to beryllium bearish connected the demand.

AI semiconductor gross ran from $4.40 cardinal successful Q2 FY25 to $5.20 billion, past $6.20 billion, past $8.40 cardinal successful Q1 FY26, the astir caller 4th up 106% twelvemonth implicit year. Q2 guidance is $10.7 billion. Tan present has "line of show to execute AI gross from chips, conscionable chips, successful excess of $100 cardinal successful 2027", with proviso secured done 2028. When a CEO locks up wafers, substrates, and high-bandwidth representation that acold out, helium is telling you the bid publication is real.

Then determination is the currency instrumentality underneath the AI story. Q1 FY26 generated $8.01 cardinal of escaped currency flow, 41% of revenue. Broadcom returned $10.9 cardinal to shareholders successful the quarter, $7.8 cardinal successful buybacks and $3.1 cardinal successful dividends. The committee authorized a caller $10 cardinal repurchase programme done December 31, 2026 and raised the dividend 10% successful December, the 15th consecutive yearly hike. Adjusted EBITDA borderline sits astatine 68%. Compounders throwing disconnected currency similar that seldom enactment inactive for long.