To The Moon

📉 Broadcom’s Worst 3-Day Performance in Years

Buy the AI Dip — or Is the Market Signaling Something Deeper?

Broadcom (AVGO) just experienced one of its sharpest short-term drawdowns in recent memory.

• 📉 -11% Friday

• 📉 -5.6% Monday

• 🧮 Nearly -17% peak-to-trough in three sessions

• Oracle (ORCL) also slid ~17%, marking its worst 3-day performance since 2020

This wasn’t an isolated stock move — it was a sentiment shock across AI infrastructure.

So the key question for investors now:

👉 Is this a buy-the-dip opportunity in a secular AI leader

👉 Or the first crack in the AI demand narrative?

⸻

🧠 Step 1: What Actually Triggered the Sell-Off?

This was not about earnings misses or collapsing revenues.

Instead, the sell-off came from:

• ⚠️ Guidance sensitivity around AI-related capex

• ⚠️ Investors questioning timing of hyperscaler spending

• ⚠️ Crowded positioning after a massive YTD run

• ⚠️ Rotation away from “priced-for-perfection” AI names

In short:

The market didn’t say “AI is dead”

It said “expectations were too high, too fast”

That distinction matters.

⸻

🔍 Is This a Fundamental Shift in AI Demand?

Short answer: No collapse — but a normalization

Broadcom sits at the core of AI infrastructure, supplying:

• Custom AI accelerators

• Networking chips

• High-speed interconnects essential for AI clusters

Hyperscalers aren’t canceling AI spend — they’re digesting it.

What’s happening now looks more like:

• A pause in acceleration, not a reversal

• Capex smoothing after aggressive front-loaded spending

• Investors re-rating timelines, not end demand

AI demand hasn’t disappeared — it’s becoming less linear.

⸻

📊 Step 2: Why AVGO Was Especially Vulnerable

Broadcom wasn’t just an AI winner — it was a valuation outlier.

Before the sell-off:

• AVGO was trading at premium multiples

• Expectations assumed flawless execution

• Any hint of “slower than expected” became unacceptable

When leadership stocks crack, they don’t drift lower —

they gap lower.

That’s what we’re seeing now.

⸻

💰 Step 3: Is AVGO Now Approaching an Attractive Entry?

This depends on time horizon.

📈 Long-Term View (Bullish)

AVGO still offers:

• Strong free cash flow

• Deep hyperscaler relationships

• Structural exposure to AI compute + networking

• Diversified revenue beyond just AI

If you believe:

AI infrastructure spend compounds over the next 5–10 years

Then AVGO after a double-digit correction starts to look interesting.

⸻

📉 Short-Term View (Caution Still Warranted)

However:

• Momentum is clearly negative

• Technical damage takes time to heal

• AI sentiment is still unwinding across the sector

• One more leg down wouldn’t be shocking

Catching the exact bottom is not required — confirmation matters.

⸻

🧠 The Real Question Investors Should Ask

This isn’t:

❌ “Is AVGO broken?”

It’s:

✅ “Did AVGO move too far ahead of reality?”

And the answer is likely yes.

But that doesn’t invalidate the long-term thesis.

⸻

🔄 AI Isn’t a Straight Line — It’s a Cycle

Every secular trend goes through:

1️⃣ Over-enthusiasm

2️⃣ Reality check

3️⃣ Consolidation

4️⃣ Sustainable growth

We’re likely transitioning from Phase 1 to Phase 2.

These moments are uncomfortable —

but they’re also where long-term positions are built, not chased.

⸻

🧩 My Take

• This drawdown looks valuation + positioning-driven, not structural

• AI demand is cooling in pace, not collapsing

• AVGO is becoming more investable — but patience still pays

• Scaling in > all-in dip buying

The strongest AI companies don’t disappear —

they reset expectations before the next leg higher.

⸻

🔥 Bottom Line

📉 Short-term pain

🧠 Long-term opportunity

⏳ Timing matters

AI didn’t end last week — it just reminded markets that even great stories need digestion.