Broadcom: Just Buy It

(7min)

Summary

  • Broadcom is partially shielded from recession fears due to long-term contracts, despite potential negative demand trends in a soft market.
  • Q1 sales grew 25% to $14.9 billion, driven by AI revenues and infrastructure sales, indicating strong performance even in a sluggish non-AI environment.
  • Broadcom's FY27 market potential is $60-$90 billion from three hyperscaler customers, showing significant growth prospects beyond current recession concerns.
  • With a price target of $252.82, Broadcom stock offers a 33% upside, making it an attractive buy despite macroeconomic uncertainties.
  • Looking for more investing ideas like this one? Get them exclusively at The Aerospace Forum. Learn More »
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In January, I initiated coverage for Broadcom (NASDAQ:AVGO) with a Buy rating. The stock lost around 8.3% since then, in line with the S&P 500. So, the decline is driven by market turmoil.

Fears of a recession driven by the

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This article was written by

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Dhierin-Perkash Bechai is an aerospace, defense and airline analyst.

Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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