Here’s What Kim Forrest and William Kerwin Think About Broadcom Inc (AVGO)

Core Viewpoint - Broadcom Inc. (NASDAQ:AVGO) is considered one of the best quality stocks to buy before 2026, despite a 16% decline in stock price following its fiscal Q4 2025 earnings report which exceeded Wall Street estimates [1] Financial Performance - Broadcom's fiscal Q4 2025 earnings report, released on December 11, showed results that topped Wall Street expectations, indicating strong demand [2] - The earnings call revealed concerns regarding products waiting for shipment, a larger than anticipated backlog, and a 100 basis point decline in margins, which negatively impacted market sentiment [2] Market Sentiment - Investor sentiment has shifted, with a tendency for negative reactions if companies do not significantly exceed expectations, particularly in the context of AI investments [2] - Despite the market selloff, the investment case for Broadcom remains strong, driven by accelerating demand in AI [3] Competitive Advantage - Broadcom benefits from its co-designed TPU chip with Google, which has seen immense demand, reinforcing its position in the semiconductor market [3] - The company operates in two segments: Semiconductor Solutions and Infrastructure Software, providing a diverse range of products and services [4]