One Reason I Can’t Stop Buying Broadcom Stock

I support hitting the bargain fastener connected Broadcom (NASDAQ:AVGO) due to the fact that I person ne'er watched a institution beryllium this squarely connected the azygous biggest superior rhythm of my beingness portion acting similar a cash-return instrumentality for shareholders. Custom AI silicon for the fistful of companies gathering frontier models, paired with a bundle concern that prints money, paired with absorption that hands the currency back. I americium long.

AI is simply a large gully

The fig that pulled maine successful is the AI line. AI semiconductor gross grew 106% year-on-year to $8.4 cardinal successful fiscal Q1 2026, and absorption guided Q2 AI gross to $10.7 billion. Hock Tan said it plainly connected the call: "we person enactment of show to execute AI gross from chips, conscionable chips, successful excess of $100 cardinal successful 2027. We person besides secured the proviso concatenation required to execute this."

The lawsuit database is nary longer a guess. Google's seventh-generation Ironwood TPU, Anthropic astatine 1 gigawatt successful 2026 surging past 3 gigawatts successful 2027, Meta's MTIA scaling to aggregate gigawatts, and OpenAI arsenic a recently disclosed sixth lawsuit expected to deploy successful measurement successful 2027 astatine implicit 1 gigawatt. That is simply a multi-year backlog.

The expert who called NVIDIA successful 2010 conscionable named his apical 10 stocks and Broadcom wasn't 1 of them. Get them present FREE.

Free currency travel is mounting

Reason 2 is the cash. Free currency travel deed $8.01 cardinal successful Q1, which is 41% of revenue, connected adjusted EBITDA of $13.13 cardinal astatine a 68% margin. Fiscal 2025 produced $26.91 cardinal successful escaped currency flow. Management is returning it aggressively.

Broadcom repurchased $7.8 cardinal of banal successful Q1, authorized a caller $10 cardinal buyback done year-end 2026, and raised the dividend 10% successful December 2025 to $0.65 per share, the fifteenth consecutive yearly summation since fiscal 2011. I americium a semipermanent income and compounding investor. That cadence is the connection I speak.

Reason 3 is the moat nether the hood. "We person been successful the silicon concern for implicit 20 years," Tan said, and Broadcom has afloat secured capableness done 2028 connected the leading-edge wafers, HBM, and substrates that each rival needs. AI networking gross grew 60% year-on-year and is guided to 40% of full AI gross successful Q2, anchored by the Tomahawk 6 power astatine 100 terabits per second.