Broadcom (AVGO) Bull Shares His ‘Only Hesitation’ About the Stock

Core Viewpoint - Broadcom Inc (NASDAQ:AVGO) is highlighted as a safer investment in the AI sector due to its diversification and targeted approach in custom chips for major companies like Alphabet and Meta [1][2]. Financial Performance - For the fiscal fourth quarter, Broadcom expects $6.2 billion in AI revenue, representing a 66% increase from the previous year [3]. - The company has secured $10 billion in AI infrastructure orders from a new customer, believed to be OpenAI, with a co-designed chip set to launch next year [3]. Competitive Positioning - Broadcom specializes in ASICs, which are chips designed for specific applications, positioning the company well as major firms seek custom chips to reduce reliance on Nvidia [4]. - The company is expected to thrive as top AI spenders collaborate with Broadcom to develop high-margin, high-volume custom chips, driving significant revenue and profit growth [5]. Market Outlook - Broadcom is on track for 10 consecutive quarters of AI-related semiconductor growth, with strong demand anticipated due to the substantial AI market opportunity [5]. - The company's history of strong capital returns to shareholders contributes to a favorable outlook for its investor base [5].