News about AVGO

Broadcom (AVGO), with a market value of US$1.6 trillion, is competing with other AI chip clients such as Nvidia and Apple for capacity at TSMC, which is expanding its advanced manufacturing and reporting record profits in 2026. The article argues that access to TSMC's leading-edge lines is key for Broadcom to keep its edge in custom XPU and networking chips while scaling its VMware-based Private AI Cloud. The bullish case is that securing long-term wafer supply would strengthen the outlook for multi-year demand for AI XPU and Ethernet products. The bearish side is that TSMC acts as a chokepoint for Broadcom's lowest-margin, most capital-intensive products, so any allocation shortfall or pricing shift could pressure gross margins.

Broadcom (AVGO) closed at $344.33 on October 15 after returning -13.59% over six months, even though revenue in the latest quarter rose 85.5% and earnings grew 216.1% year over year. Most of that growth comes from custom chips designed for large technology companies, which are sticky because customers cannot switch suppliers without restarting engineering, while infrastructure software is a smaller business acquired through deals. Per CNN, analysts' median target sits 52.47% above the current price, while the stock is down 1.43% over twelve months. The article flags concentration risk, since the custom chip business depends on a few very large customers able to bring the work in-house, and notes a trailing P/E of 46.50x.