Broadcom’s Brilliant Positioning is Why I Am Loading Up Over and Over

2 weeks ago 18

Alex Sirois

Mon, August 10, 2026 astatine 9:49 AM CDT 4 min read

Quick Read

Broadcom holds a near-monopoly connected high-speed AI Ethernet switching, collecting gross careless of which hyperscaler wins the customized silicon race.
AVGO guides Q3 AI semiconductor gross to $16 billion, a 200%+ year-over-year jump, portion NVDA competes with the precise customers Broadcom serves.
Hock Tan projects implicit $100 cardinal successful fiscal 2027 AI revenue, backed by a booking backlog extending visibility done 2028.
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I support hitting the bargain fastener connected Broadcom (NASDAQ:AVGO) for a elemental reason: it is the uncommon AI communicative wherever the maturation is already booked, the currency is already showing up, and I bash not person to conjecture which hyperscaler wins the compute race. That past portion is the full thesis. My wealth keeps landing present due to the fact that Broadcom holds a near-monopoly connected high-speed AI Ethernet switching portion acting arsenic the superior beneficiary of hyperscalers moving distant from general-purpose GPUs toward customized silicon. When Google, Meta, OpenAI, and Anthropic each perpetrate to their ain accelerators, Broadcom's XPUs and switches beryllium connected the measure of materials either way.

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The Receipts Behind the Conviction

Q2 FY2026 gross landed astatine $22.187 billion, up 47.9% twelvemonth implicit year, with AI semiconductor gross of $10.80 cardinal increasing 143%. Non-GAAP EPS of $2.44 extended the bushed streak to 8 consecutive quarters. Free currency travel of $10.262 cardinal converted astatine 46% of revenue, and adjusted EBITDA borderline deed 69%. Cash connected the equilibrium expanse much than doubled twelvemonth implicit twelvemonth to $19.628 billion.

Then determination is the guardant book. Q3 guidance calls for ~$29.40 cardinal successful revenue, with AI semiconductor gross guided to $16.00 billion, a 200%+ YoY jump. Q2 AI bookings came successful astatine implicit $30 cardinal against $10.8 cardinal shipped. Hock Tan said "Our visibility present extends into 2028" and reiterated fiscal 2027 AI gross successful excess of $100 billion.

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The income portion keeps maine anchored. Broadcom has raised its dividend for 15 consecutive years since fiscal 2011, with the astir caller 10% rise to $0.65 per quarter. The output sits astatine 0.6%, truthful this is simply a dividend maturation story, not an income story. Forward P/E of 23 against triple-digit AI maturation is the valuation I support coming backmost to.

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