Lanceljx
09-04 10:34

I lean towards buying the pullback gradually rather than waiting for expectations to collapse.


The $200m Q4 revenue miss matters because AVGO is priced for near-perfect execution, but the underlying AI story actually strengthened. AI semiconductor revenue hit $16.7bn, +221% YoY, with Q4 expected to accelerate to $21.7bn. More importantly, Broadcom now sees ~$115bn of AI semiconductor revenue in FY2027 and says demand exceeds that outlook.


That makes the sell-off look more like a valuation reset than a thesis break. The warning from Credo is still important: at elevated multiples, beats are expected and margins/guidance determine the reaction.


I would not chase AVGO immediately after the drop, but I also would not wait for a perfect entry. Scale in if weakness continues. The bigger question is whether that $115bn FY2027 target converts into earnings and cash flow without margin deterioration.

Broadcom Pitches a $230B 2028 Target — Why Is the Market Only Paying for Next Quarter?
Broadcom fell 2.74% on 2.35x volume, ~28% below its high, despite record revenue of $29.6bn, +86% YoY. Hock Tan set an FY2028 AI revenue target of $230bn, ~4x this year's — selling 2028 while the market pays for next quarter, which guided light. Macquarie upgraded at $490 on Anthropic's ramp; BofA cut its target while raising estimates — higher profits at a lower multiple. Peers held: Marvell +1.14%, Nvidia +1.80%. Bulls anchor on lock-in through 2028; bears on the discount rate: distant revenue is worth less until rates peak. Reprice on the $230bn roadmap, or wait for guidance to catch up?
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Comments

  • AfraSimon
    09-04 18:23
    AfraSimon
    That $115bn FY2027 target is exactly where I get skeptical. Revenue can scale, but if gross margin slips on mix or supply chain costs, the multiple resets again.
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