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Harvard College Inventory Portfolio 2026: High 10 Picks. Broadcom (NASDAQ:AVGO) ranks #6 (see Harvard College Inventory Portfolio 2026: High 5 Picks).
Harvard’s Stake: $146,681,741
Broadcom (NASDAQ:AVGO) is up roughly 48% over the previous 12 months, but bulls imagine there may be nonetheless significant upside forward. The core cause is easy: the customized AI chip business is booming as hyperscalers search lower-cost, purpose-built options to off-the-shelf GPUs — and Broadcom dominates this house. CEO Hock Tan said earlier this 12 months that the corporate has clear visibility to AI income from chips alone exceeding $100 billion in 2027, offering a uncommon and concrete long-term anchor for buyers.
What makes Broadcom’s (NASDAQ:AVGO) place significantly defensible is its internet of locked-in, multi-year hyperscaler partnerships. Meta prolonged its partnership by 2029 to co-develop a number of generations of its customized AI coaching and inference chips utilizing Broadcom’s 2nm-class expertise. Google prolonged its TPU improvement and provide settlement by 2031, guaranteeing Broadcom a five-year dedicated deployment runway.
Broadcom (NASDAQ:AVGO) can also be collaborating with Anthropic on a 4.5GW compute capability deal and with OpenAI on a large 10GW customized inference engine — although each relationships contain complicated financing preparations that the market is watching intently. Mixed, these partnerships have pushed Broadcom’s AI order guide to $73 billion, with its complete company backlog approaching $162 billion.
Nevertheless, the valuation is turning into more and more tough to justify. Broadcom’s (NASDAQ:AVGO) non-GAAP P/E stands at 61x — considerably increased than different high-growth chip gamers like Nvidia (36x) and Micron (44x). That is more durable to defend on condition that Broadcom’s 3-year income CAGR of 25.66% and internet revenue CAGR of 24.96% pale compared to Nvidia’s progress trajectory. The inventory is successfully priced for perfection, that means any hit upon earnings or a walk-back of the $100 billion 2027 goal might set off a pointy rerating.
Carillon Eagle Development & Earnings Fund said the next concerning Broadcom Inc. (NASDAQ:AVGO) in its Q1 2026 investor letter:
“Broadcom Inc. (NASDAQ:AVGO) was weak for the quarter as increased inflation led buyers to concern a slowdown in hyperscaler spending. This led to decrease spending on customized silicon, the principle cause for Broadcom’s power over the past couple of years. We imagine Broadcom nonetheless has among the greatest tech within the house and might be one of many greatest winners from AI (Click on Right here to Learn the Letter in Element).”
