Broadcom's Golden Opportunity: From Wyckoff Accumulation to AI Domination!
Kia ora Tiger traders.
Hold on to your coffee mugs because
$AVGO is on a wild ride, and here’s why I’m all in with Broadcom! Not only is it munching on the VMware acquisition like it’s a bag of chips, but it’s also rolling in cash like a rockstar rolling in groupies. And let’s not forget – Broadcom is front and centre in the AI spotlight, making it one of the most exciting tickers to watch right now.$Broadcom(AVGO)$
Recent Price Action: Did you catch that? $AVGO took a nosedive from $176.7 down to $157.00 But guess what? Buyers are stepping up, and it’s game on for accumulation. Keep an eye on it, folks – this could be the start of something big!
Cash is King: Broadcom’s got cash generation down to a science. Think about it – the stock's up a whopping 602% over the past five years! That’s like finding a $20 bill in your old jeans every day. Their $69 billion VMware buy is shaping up nicely, with costs slashed and profits maximised faster than you can say “ka-ching.” And with 30% of VMware’s big clients already signed up for the new subscription model, Broadcom’s doing its thing, making bank.
Debt? No Sweat: Sure, they’ve got $74 billion in debt, but who’s worried when you’re raking in $17.6 billion in free cash flow? That’s like turning water into wine, but better. Broadcom’s been growing its net income by 49% and free cash flow by 37% annually over the past decade. If that doesn’t scream profitability, I don’t know what does.
AI Powerhouse: Broadcom’s got the second-best AI story out there, just a step behind Nvidia. Their custom ASICs are like the Swiss Army knives of AI chips – efficient, powerful, and all the rage. Revenue from AI hit $3.1 billion in Q2 2024, and management’s modest $11 billion forecast for the year looks like an understatement. Big players like Google, Meta, and ByteDance are all in, which means Broadcom’s future is looking shinier than a new penny.
Diversification Darling: Broadcom isn’t just about semiconductors. Their software game is strong, providing a nice cushion if the AI bubble bursts. Q2 2024 saw software revenue skyrocket to $5.3 billion, with VMware alone contributing $2.7 billion. By 2025, VMware’s expected to hit $4 billion in quarterly revenue, proving that Broadcom’s got all its bases covered.
Fun Fact: Did you know that Broadcom's name is a blend of "broadband" and "communication"? Talk about staying true to your roots while branching out into the future!
The Bottom Line: Missed out on Nvidia? No worries. Broadcom’s got room to grow, and at 36 times this year’s earnings estimate, it’s a bargain compared to Nvidia’s 47 times. With a solid mix of semiconductor and software revenue, Broadcom is set to climb higher.
So, keep your eyes peeled and your buy buttons ready – $AVGO is gearing up for a thrilling ride!
Happy trading ahead! Cheers, BC 🍀
@Tiger_comments @TigerStars @Daily_Discussion
Comments