r/stocks
Broadcom’s drop looks way overdone to me.
Author argues AVGO's drop is an overreaction to guidance expectations, citing strong AI fundamentals and Cathie Wood's recent buy.
- Core business fundamentals remain strong with incredible AI revenue growth and reaffirmed long-term outlook.
- The sell-off was driven by unmet high expectations for guidance raises rather than deteriorating business performance.
- Institutional validation via Cathie Wood's $8.7M purchase suggests perceived value in the current pullback.
The company didn’t report bad results. AI revenue is still growing at an incredible pace, management reaffirmed its long-term AI outlook, and demand from hyperscalers remains strong.
The stock got crushed because investors wanted another guidance raise and didn’t get one.
That’s an expectations problem, not a business problem.
Interesting that Cathie Wood bought about $8.7 million worth of Broadcom after the selloff. Whether you like her or not, she clearly sees value in the pullback.
Feels like the market treated this as if the AI story broke, when in reality Broadcom is still one of the biggest beneficiaries of AI infrastructure spending.
What am I missing?
https://www.thestreet.com/investing/stocks/cathie-wood-buys-8-7-million-stock-broadcom-avgo
Yeah, bold of OP to use “Cathie Wood sees value” as an argument in favour of AVGO.
If Cathie Wood thinks it’s a good investment that means it’s usually time to sell
True, all of the ARK funds are living proof that 👆 statement is true 😅
If you’re holding for 3 years then hopefully 395 vs 388 won’t matter
Hock Tan is a very savvy businessman, and is an extremely intelligent person... but... I really wish he'd let his CFO run the earnings calls.
You arent comparing them.
But the market usually does so. No serious investor looks at the AI chips story and goes “i am going to look at broadcom in isolation.”
My point is if nvda can fall after superb earnings and extremely strong forward guidance at a lower forward PE, why is it so strange that broadcom can fall after reasonably good earnings and murky forward guidance?
So is your investment strategy
It’s weird he had those numbers queued in his mind to be read, but he corrected myself quickly, that was just a small flub
And microns was 5 aftet their march 2026 earnings but now its like at 10 given the current price.
Yup. MU is cheap as hell, but i compared AVGO with NVDA instead since they are more closely related.
It's cheap as hell for a reason. Memory is a commodity and after every boom, there is a bust. However, when that bust happens is the trillion dollar question. It could be this year or it could be 5 years from now. Who knows.
I don't see a world where we'll need less memory going forward.
Also, the IPO money for Anthropic, SpaceX, and OpenAI is all gonna go into buying semi.
Same with Google's 80B equity raise and whatever amount of equity raise Meta is gonna do.
So expect around 400B extra going into the datacenter buildout on top of what have already been commited.
You know whats expensive? LITE. I hate finance influencers pumping it so much, that and DRAM so many finance influencers are pumping DRAM when owning micron alone is much better.
When people make these statements it’s always under the presumption that the company was properly valued before the dip. That may not be the case though. Sometimes you have to admit you were wrong. That’s the market in a nutshell. Have to be agile.
It takes a special talent to put together a losing portfolio in a bull run
That really isn’t cheap. Micron is 8 and growing 3x faster, why wouldn’t you buy them instead?