Broadcom Is The New Nvidia, And That's The Problem

Tech Stock Pros Investing Group Follow Summary Broadcom Inc. shares are roughly flat year-to-date, and we don't expect things to turn for the better anytime soon. AVGO stock is caught in a similar situation to Nvidia, holding 70% of the ASIC market and now needing to fend off the growing competition or lose share. This means cutting price to remain competitive or losing market share as hyperscalers increasingly multi-source custom AI ASICs, which Google has already exemplified well. AVGO shares are down 15% since our sell call, and we don't think it's time to step back, as "all roads leading to ASIC" is no longer synonymous with just Broadcom. This idea was discussed in more depth with members of my private investing community, Tech Contrarians. Learn More » Zeferli/iStock via Getty Images Investment Thesis Broadcom Inc. ( AVGO ) shares look broken over the past three quarters, underperforming the SOX benchmark over the last two and coming in line with it a quarter prior to that, meaning that buying Broadcom This article was written by Tech Stock Pros 12.95K Followers Follow Tech Stock Pros is a team of three former technology sector engineers with a long history of investing in the tech sector. They run Tech Contrarians, an investing group providing institutional-level company research to individual investors. Utilizing a live portfolio with quarterly updates, bi-weekly newsletters, and answering questions daily via chat, Tech Stock Pros aims to demystify investing in the technology sector. Learn more. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.