The author says they increased their Broadcom (AVGO) position and plans to add more after the next earnings report, citing a stock close of $326.08 on October 30, down 12.74% over the past year even as quarterly revenue rose 85.5%. CEO Hock Tan said customer demand for custom AI chips exceeds an outlook of about $115 billion for fiscal 2027, and that the company will work to improve supply constraints. AI semiconductor revenue reached $16.70 billion in the third quarter, up 221%, while free cash flow was $13.665 billion and the $0.65 quarterly dividend yields about 0.8%. The author names customer concentration as the main risk, since Broadcom works closely with six XPU customers and expects Anthropic to become the largest in 2027. The author prefers Broadcom over NVIDIA (dividend yield about 0.13%) and AMD (129 times trailing earnings, no dividend).
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