Broadcom: This AI Moat Just Got Deeper (And Cheaper)

(11min)

Summary

  • Broadcom's recent 11% stock dip offers a buying opportunity for GARP investors, with valuation now more reasonable, despite ongoing geopolitical risks with China.
  • Q1 2025 results show strong fundamentals: 25% YoY revenue growth and 45% YoY EPS rise, driven by AI semiconductor revenue.
  • Broadcom's custom silicon XPUs for hyperscalers like Google, Meta, and ByteDance provide a competitive edge, promising continued top-line growth in AI markets.
  • Despite potential geopolitical risks and high valuation multiples, Broadcom's solid growth rates, high margins, and expanding TAM justify a "Buy" rating with a 23% upside.

Broadcom

G0d4ather

Intro & Thesis

I initially was neutral on Broadcom's (NASDAQ:AVGO) stock prospects, admitting the firm's long-term growth potential, but fearing short-term weakness because of stretched valuation multiples and oversold conditions on the tech market. That was in

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This article was written by

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Daniel Sereda is chief investment analyst at a family office whose investments span continents and diverse asset classes. This requires him to navigate through a plethora of information on a daily basis. His expertise is in filtering this wealth of data to extract the most critical ideas. He runs the investing group Beyond the Wall Investing in which he provides access to the same information that institutional market participants prioritize in their analysis. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AVGO either through stock ownership, options, or other derivatives. 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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