@financein90s: Is Broadcom an opportunity? FACTS: Broadcom guided to $230B in AI chip revenue by 2028. The entire company does about $89B today. Last quarter: revenue up 86% YoY. AI chip revenue up 221% to $16.7B, beating their own guidance by $700M. 61x trailing GAAP earnings it looks expensive, but looking forward: trailing non-GAAP EPS is $9.76, management targets $30 by 2028. That's ~65% earnings CAGR on a 46% free cash flow margin. Trading at near a forward earnings multiple in line with the average S&P 500 company, on a business growing several times faster. Roughly Nike's forward multiple, except Broadcom generates more cash than Nike does revenue. RISKS: So why isn't the market paying up? Three reasons: 1. Gross margins are compressing and legacy revenue is slowing to a crawl. 2. Customer concentration — a handful of buyers make up the bulk of AI revenue. Meta & Google are cash flowing monsters, OpenAI & Anthropic are burning cash unsustainably. 3. Broadcom is backstopping five years of lease payments on AI racks financed by Apollo and Blackstone. Disclosed exposure on the first tranche is $29B, for one gigawatt. Management is planning for 20GW. None of it is hidden. But the markets are pricing in significant uncertainty on the durability & quality of these future forecasts. If you’re bullish custom silicon, this presents an opportunity. If not, then you probably weren’t looking at Broadcom regardless. #investing #broadcom

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Tuesday 08 September 2026 00:20:55 GMT