[Music] Good Tuesday morning. I'm Yahoo Finance executive editor Brian Sazy and this is opening bid. What's on my investing mind today.You're wondering is it Meta's $2 billion deal for Chinese AI company called Madis made during a slow week. Nope. Or how about the Fed minutes out later today.Definitely not those Fed minutes. It will never be VIP to me. It will it just vote.I just I'm not a fan of Fed minutes. What's on my mind is one mythical investing creature. Actually, that creature is the oracle of Omah ...

We came across a bullish thesis on Broadcom Inc. on Nikhs’s Substack. In this article, we will summarize the bulls’ thesis on AVGO. Broadcom Inc.'s share was trading at $402.96 as of November 28th. AVGO’s trailing and forward P/E were 103.32 and 43.10 respectively according to Yahoo Finance. Is ASML’s (ASML) Leadership Threatened After Substrate’s Recent Better Technology Claims? Broadcom Inc. designs, develops, and supplies various semiconductor devices and infrastructure software solutions worldwide. A ...

Core Insights - Broadcom (AVGO) is positioned as a strong risk-adjusted investment in the AI ecosystem, utilizing a "Double Moat" strategy to hedge against market volatility [2][11] - The company operates a diversified business model that combines stable legacy software revenue with high-growth AI infrastructure, providing a balanced investment opportunity [5][9] Business Model - Broadcom employs a "Mullet" strategy, characterized by stable, less volatile revenue from legacy software and high-growth potential from AI-related custom silicon [5][9] - The company has a significant cash flow from its VMware acquisition, which has transitioned to a subscription model, allowing for substantial price increases without losing customers [9] Customer Relationships - Broadcom has established partnerships with major tech companies like Google and OpenAI, positioning itself as a critical infrastructure provider rather than just a chip supplier [7][10] - The company’s custom chips are estimated to be 2x–3x more power efficient than Nvidia GPUs, making them attractive for large-scale applications [10] Valuation Metrics - Broadcom's forward non-GAAP P/E ratio is approximately 36x, significantly lower than Nvidia's 50x and Palantir's 100x sales, indicating it is priced for growth supported by a software monopoly [8][10] - The perceived high trailing P/E of ~100x is attributed to accounting factors rather than actual performance metrics [8] Market Position - Broadcom is seen as a foundational player in the AI boom, providing essential chips and software that support the broader ecosystem, contrasting with competitors focused solely on high-performance GPUs [11] - The company is expected to benefit from increased demand for custom chips as major players in AI seek to reduce costs associated with Nvidia's offerings [10][14]

Group 1: Market Position and Potential - Certain Wall Street analysts expect Broadcom and Meta Platforms to join the $2 trillion club, which currently includes Nvidia, Apple, Alphabet, Microsoft, and Amazon [1] - Broadcom is well positioned to benefit from artificial intelligence (AI) due to its leading market position in high-speed Ethernet switching and routing chips, as well as application-specific integrated circuits (ASICs) designed for AI workloads [2][3] Group 2: Financial Performance - Broadcom reported a 22% increase in revenue to $16 billion, driven by strong sales in custom AI and networking chips, and a 36% increase in non-GAAP earnings per share to $1.69 [4] - Meta Platforms experienced a 26% revenue increase to $51 billion, with GAAP net income rising 20% to $7.25 per diluted share [9] Group 3: Future Growth Estimates - Wall Street estimates Broadcom's adjusted earnings will grow at 31% annually through 2028, making its current valuation of 60 times earnings appear reasonable [5] - Meta Platforms' earnings are expected to increase at 16% annually over the next three years, with a current valuation of 28 times earnings [10] Group 4: Analyst Target Prices - Blayne Curtis at Jefferies has set a target price of $480 per share for Broadcom, indicating a 29% upside from its current price of $373 [7] - Scott Devitt at Wedbush has assigned a target price of $920 per share for Meta Platforms, suggesting a 47% upside from its current price of $627 [7]

We recently published 11 Stocks Jim Cramer Discussed, Including A Potential “Worst Stock Ever”. Broadcom Inc. (NASDAQ:AVGO) is one of the stocks Jim Cramer recently discussed. Cramer frequently discusses Broadcom Inc. (NASDAQ:AVGO) in his morning show, and most of his remarks are focused on the firm’s semiconductor business. The rise of AI and the subsequent demand for AI chips has placed Broadcom Inc. (NASDAQ:AVGO) in a unique industry position due to its ability to design custom AI chips. Cramer also re ...

Core Viewpoint - Broadcom is significantly focused on its custom AI chips, which are driving its share price, but the company has multiple growth avenues, particularly through its infrastructure software segment, VMware [1][4]. Group 1: Financial Performance - Broadcom's infrastructure software segment experienced revenue growth of 25% in fiscal Q2 and 17% in fiscal Q3 [4]. - The total revenue for Broadcom over the last 12 months was approximately $60 billion, which is a small fraction of the overall cloud computing market [6]. Group 2: Market Opportunities - The combined revenue from cloud service segments of major tech companies like Microsoft, Alphabet, and Amazon reached $270 billion over the past year [5]. - A significant shift towards private cloud adoption is anticipated, with 83% of enterprise Chief Information Officers planning to move some workloads from public to private clouds, up from 43% in 2020 [12]. Group 3: VMware's Role - Broadcom's VMware software aims to enhance the attractiveness of private clouds, providing a unified management solution for private and hybrid cloud infrastructures [8][9]. - The latest VMware update, VCF 9.0, is designed to simplify private cloud management, positioning it as a viable alternative to public cloud services [9]. Group 4: Industry Trends - Rising costs associated with public cloud services are a concern for businesses, with many professionals indicating that cloud costs are too high and lack of visibility hampers their work [10]. - A growing preference for private or hybrid clouds among enterprises building AI models is evident, indicating a potential growth opportunity for VMware [13]. Group 5: Investment Outlook - If a major shift towards private clouds occurs, Broadcom could realize significant advantages, particularly given the substantial revenues generated by public cloud services [14]. - The focus on AI chips may overshadow VMware's potential contributions, which could provide underappreciated upside for Broadcom's stock in the long term [14].

Group 1 - Broadcom Inc. is positioned as a leading player in the AI computing sector, with a significant contract extension for CEO Hock Tan that includes stock compensation tied to AI product sales targets of $90 billion and $120 billion by 2030 [1][2] - Analysts predict that AI chip sales will reach approximately $20 billion by 2025, with Broadcom's Q3 2025 AI revenue growing 63% year-over-year to $5.2 billion, indicating strong market demand [2] - Broadcom has established itself as a key contributor in AI infrastructure, benefiting from the demand from hyperscalers seeking alternatives to NVIDIA's merchant silicon, and is recognized for its custom silicon development that offers cost efficiency for specific workloads [3] Group 2 - The market for custom silicon is evolving, with Broadcom's leadership position allowing it to capitalize on the shift away from merchant chips, enhancing its competitive advantage [3] - While Broadcom is seen as a strong investment opportunity, some analysts suggest that other AI stocks may present greater upside potential with less downside risk [3]

Core Insights - Broadcom reported record revenue of $15.952 billion for Q3 FY2025, reflecting a year-over-year growth of 22.0% and a quarter-over-quarter growth of 6.3% [1] - The company's CEO, Hock Tan, highlighted strong performance in custom AI accelerators, networking, and VMware as key drivers of revenue growth [2] Financial Performance - Total revenue for Q3 FY2025 reached $15.952 billion, approximately ¥1139.01 billion at current exchange rates [1] - AI revenue accelerated to $5.2 billion, marking a year-over-year growth of 63% [2] - The company anticipates AI semiconductor revenue to increase to $6.2 billion in Q4, continuing a growth streak for 11 consecutive quarters [2] Customer Base and Market Position - Broadcom identifies seven major AI companies as its primary customer base in the custom AI XPU (ASIC) sector, having secured orders from three of them [4] - A new customer has been converted, placing an order exceeding $10 billion for Broadcom's XPU-based AI computing racks [4]

Core Insights - The Chinese software-defined computing market is undergoing significant changes, with H3C emerging as a leader in market share for the second half of 2024, driven by a restructuring in the virtualization market following Broadcom's acquisition of VMware [1][11] - The shift from perpetual licensing to subscription models has led to cost increases for enterprise users, with expenses rising by 3 to 10 times, while the removal of Chinese language support has created challenges for technical teams [1][2] - The core contradiction in domestic replacement has shifted from functional availability to operational reliability, with stability concerns becoming a critical decision-making factor [2][3] Group 1: Market Dynamics - H3C has positioned itself as a pioneer in the software-defined computing market, achieving the second-largest market share according to IDC [1] - The virtualization market is experiencing a deep restructuring, influenced by major decisions from international giants like Broadcom [1][11] - The transition to subscription models and the elimination of local support have created a gap between international strategies and local needs, leading to a trend towards domestic alternatives [1][2] Group 2: Technological Advancements - H3C's CAS has proposed a replacement path that emphasizes "comprehensive benchmarking and partial surpassing," addressing industry pain points through full-stack adaptation of domestic software and hardware [3][4] - Innovations in storage performance and data migration technologies have significantly improved operational efficiency, with CAS achieving migration speeds of over 1GB/s, doubling industry standards [5][7] - The introduction of proactive high availability mechanisms enhances business continuity by monitoring hardware indicators and triggering online migrations before potential failures occur [6][10] Group 3: Competitive Landscape - The competition in the virtualization market is evolving, with a focus on performance parameters and ecosystem collaboration capabilities [9][11] - H3C's AI-driven management and fault detection technologies are setting new standards in operational efficiency, reducing human error risks in virtual environments [10] - The successful migration of over 600 virtual machines for a major telecommunications operator demonstrates H3C's ability to enhance resource utilization and establish new benchmarks for cloud transformation [11][12] Group 4: Industry Implications - The ongoing accumulation of replacement cases in sectors like finance and healthcare is reshaping the foundational logic of China's cloud computing infrastructure [13] - The shift towards domestic virtualization solutions is not only a matter of security but also represents an optimal path for technological advancement [12][13]

Group 1 - Dell Technologies is initiated with a Strong Buy rating and a price target of $135, recognized as a global leader in IT infrastructure, commercial PCs, and cloud solutions [1] - The investment conviction is based on two compounding catalysts that are expected to drive growth [1] - Moretus Research emphasizes a structured, repeatable framework to identify companies with durable business models and mispriced cash flow potential, focusing on U.S. public markets [1] Group 2 - Moretus Research combines rigorous fundamental analysis with a judgment-driven process, avoiding noise and overly complex forecasting [1] - Valuation methods are based on sector-relevant multiples tailored to each company's business model and capital structure, emphasizing comparability and relevance [1] - The research coverage tends to favor underappreciated companies undergoing structural change or temporary dislocation, aiming for asymmetric returns through dispassionate analysis [1]