I Won’t Stop Buying Broadcom Until It Reaches This Point

I support buying Broadcom (NASDAQ:AVGO) and I americium not embarrassed to accidental it retired loud. Every paycheck model that opens, I add. The post-earnings selloff successful June lone reinforced my conviction, confirming that the marketplace keeps handing semipermanent holders a discount connected the 1 AI infrastructure sanction that besides pays maine to wait.

The halfway of my thesis is simple. Hock Tan built a institution that sells the picks and shovels the hyperscalers cannot bargain anyplace else, and helium pairs that with bundle currency flows from VMware and a dividend I tin program a status around. That operation is wherefore I support clicking buy.

The Numbers That Keep Me Coming Back

Start with the AI engine. Q2 FY2026 AI semiconductor gross deed $10.80 billion, up 143% year-over-year, and absorption guided Q3 AI gross to $16.0 billion, maturation of implicit 200%. CEO Hock Tan told shareholders: "The momentum continues and successful Q3 we expect semiconductor gross from AI to turn implicit 200 percent year-over-year to $16.0 billion." Total Q2 gross landed astatine $22.19 billion, up 47.9%, with non-GAAP EPS of $2.44, the eighth consecutive 4th of beating expectations.

Next comes the cash. Q2 escaped currency travel was $10.26 billion, oregon 46% of revenue, with an adjusted EBITDA borderline of 69%. Full-year FY2025 escaped currency travel reached $26.91 billion. Cash procreation astatine that standard speaks for itself.

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Then the dividend. Broadcom has raised its payout 15 consecutive years since fiscal 2011, with the past hike lifting the quarterly to $0.65, a 10% increase. That is the benignant of streak I program a status withdrawal docket around.

Why This One, Not NVIDIA oregon AMD

Every scholar lands archetypal connected NVIDIA (NASDAQ:NVDA) oregon Advanced Micro Devices (NASDAQ:AMD) erstwhile they deliberation AI chips. I support landing present alternatively due to the fact that Broadcom sells thing chiseled from NVIDIA's lineup: customized ASICs designed to spec for idiosyncratic hyperscalers, positive the networking silicon that stitches those clusters together. The Apple relationship, reported by retail arsenic a $30B+ customized AI spot woody done 2031, is the template. Add a Semiconductor Solutions conception increasing 79% year-over-year and an Infrastructure Software conception producing $7.18 cardinal of high-margin recurring revenue, and I ain a concern exemplary neither axenic GPU shaper offers, with a dividend streak neither matches.