Broadcom: A Great Company At A Fair Price

Louis Gerard2.47K FollowersFollow5ShareSavePlay(8min)CommentsSummaryBroadcom (AVGO) is rated a Buy, reflecting robust AI-driven growth, dominant custom accelerator market share, and strong execution post-VMware acquisition.AVGO guides for $10.7B in Q2 AI revenue and targets $100B AI revenue by fiscal 2027, underpinned by hyperscaler partnerships and industry-leading design expertise.Despite a premium P/E of 43.85 and FCF yield of 1.8%, AVGO’s gross margin near 77% and 41.6% FCF conversion support aggressive buybacks and a 15% CAGR dividend.Key risks include hyperscaler concentration, TSMC supply chain exposure, high post-VMware debt, and competitive pressure from Nvidia’s entrenched CUDA ecosystem. Sundry Photography/iStock Editorial via Getty Images Introduction A lot has happened for Broadcom (AVGO) since I last rated it a Buy back in early September 2025 and I want to revisit my thesis as to see if the company can still lead the chargeThis article was written byLouis Gerard2.47K FollowersFollowAs a detail-oriented investor with a strong foundation in finance and business writing, I focus on analyzing undervalued and disliked companies or industries that have strong fundamentals and good cash flows. I have a particular interest in sectors such as Oil&Gas and consumer goods. Basically, anything that has been unloved for unjustified reasons that could offer substantial returns. Energy Transfer is one of those companies that I came across when no one wanted to touch it and now I can't resolve myself to sell it. I will always focus more on long-term value investing but I can sometimes lose myself in possible deal arbitrage such as with Microsoft/ Activision Blizzard, Spirit Airlines/Jetblue (that one still hurts), and Nippon/U.S. Steel (perfect exit at $50.19). I tend to shun businesses that I can't understand either high-tech or certain consumer goods such as fashion (give me a Levi's jeans). I don't understand why anyone would invest in cryptocurrencies as well.

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