Summary

• Broadcom delivered record Q2 results, with revenue up 48% and AI semiconductor revenue surging 143%.
• Despite robust growth, AVGO stock dropped nearly 15% as guidance failed to exceed elevated investor expectations and gross margin outlook declined.
• Valuation concerns are mounting: AVGO trades at a premium to peers like NVDA and AMD, with investors already pricing in years of flawless execution.
• I rate AVGO a Sell, citing limited upside at current levels and more attractive opportunities in other AI names.
• This idea was discussed in more depth with members of my private investing community, The Pragmatic Investor. Learn More »
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Thesis Summary

The AI trade finally cracked last week, and it looks like Broadcom's (AVGO) earnings might have been the trigger.

Although revenue grew 48%, and AI revenue surged 143%, investors were not pleased, and the stock dropped

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