Broadcom: AI Is Here To Stay

Michael Del Monte6.96K FollowersFollow5ShareSavePlay(9min)Comment(1)SummaryBroadcom Inc. is rated Strong Buy with a $697/share target, driven by surging AI data center demand and custom silicon adoption.AVGO's custom ASIC business is set for exceptional top-line growth, with major agreements secured across hyperscalers and AI developers like Alphabet and Anthropic.Power constraints in data centers can help accelerate demand for AVGO’s power-efficient chips, especially for inferencing and agentic AI workloads.Despite trading at a premium (42x EV/aEBITDA), AVGO is positioned for accelerating revenue and potential margin expansions through higher volume sales. SweetBunFactory/iStock via Getty Images The AI data center market is receiving substantial tailwinds as demand outstrips supply, leading to improving economics for compute capacity. With a growing demand for AI inferencing and agentic AI, I believe Broadcom Inc. (This article was written byMichael Del Monte6.96K FollowersFollowMonte Independent Investment Research: Michael Del Monte is a buy-side equity analyst with expertise in the technology, energy, industrials, and materials sectors. Prior to working in the investment management industry, Michael spent over a decade in professional services working across industries that include O&G, OFS, Midstream, Industrials, Information Technology, EPC Services, and consumer discretionary.Analyst’s Disclosure: I/we have a beneficial long position in the shares of AVGO, META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.