$Broadcom(AVGO)$ Broadcom's selloff looks more like an expectations reset than a breakdown of the core thesis. AI revenue still grew strongly, and the custom ASIC opportunity with hyperscalers remains one of the most compelling themes in AI infrastructure. The VMware acquisition also continues to strengthen Broadcom's software cash flow profile.
The issue is valuation. After a huge rally and record highs, investors were expecting not just strong results, but accelerating guidance. When expectations become extreme, even good earnings can trigger profit-taking.
Whether AVGO falls below $400 depends more on market sentiment than fundamentals. If AI-related names continue derating and investors rotate away from high-multiple growth stocks, a move below $400 is possible. However, a sustained break would likely require either weakening AI spending trends or broader market risk-off conditions.
For investors who missed the run, a gradual accumulation strategy makes more sense than trying to catch the exact bottom. The long-term AI and software story appears intact, but after such a large advance, volatility and multiple compression remain real risks. A 10-20% correction would not necessarily invalidate the investment case.
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