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Broadcom gains recurring revenue as design partner on Meta's four-generation custom Iris silicon program through 2029 at a six-month cadence, raising conviction. A leaked Meta memo, per Reuters, shows 7GW of compute in 2026 doubling to 14GW in 2027, with Iris entering production in September. Custom silicon also erodes Nvidia's 70%+ margins. The wider AI buildout is debt-fueled, with hyperscaler gross leverage doubling to 1.8x in two quarters. x.com x.com
Broadcom's sell-off after a blowout quarter is a textbook sign that AI infrastructure is priced for perfection. Record revenue of about $22.2B rose 48%, AI semis grew 143% to $10.8B, Q3 AI is guided up over 200%, and FY27 AI revenue is seen above $100B, yet the stock fell and dragged Nasdaq futures and Asian tech lower. A strong jobs print would hit high-multiple tech hardest, while a soft one could revive the easing narrative. x.com x.com
Broadcom's custom AI chips and networking could drive earnings beyond what its valuation implies over 2-3 years. It is the favorite semiconductor opportunity now, preferred over NVIDIA without replacing it. AI semiconductor revenue is projected at about $58B in FY2026, $115B in FY2027 and potentially $230B in FY2028. At about 17x FY2027 consensus adjusted earnings, risk/reward is compelling if growth materializes; customer commitments add visibility, but delays and financing remain risks. x.com … Show more
Broadcom stands to benefit from Meta's growing MTIA shipments, though its position in later designs is less secure. KeyBanc estimates 300,000-500,000 MTIA units in 2026 and 600,000-800,000 in 2027. Its table shows Broadcom won Iris, Arke and Astrid, but Olympus was canceled, Phoebe went to GUC and Apollo has no award decision yet. x.com
Broadcom borrowing again signals a $1.8 trillion company running low on cash. Per @KobeissiLetter, citing the WSJ, Broadcom is seeking more than $50 billion of financing for OpenAI's custom AI chip, with Apollo and Blackstone among the lenders it has approached. x.com
Broadcom's integrated optics, electronics and packaging could lower custom-chip system costs because separate suppliers defend their margins. At similar valuations, it is preferred to Nvidia and has more room to beat expectations. Google TPU v8 shipments are estimated at 4.0M in 2026 and 9.1M in 2027, assuming Broadcom supplies the remainder after MediaTek's allocation. Anthropic financing adds value only if chip profit exceeds likely support payments and capacity costs. x.com x.com
Broadcom's custom silicon business stands to turn Anthropic's IPO funding into chip orders. The cash raised for Anthropic's compute spending would flow down the stack into Broadcom's order book. x.com
Broadcom is more overvalued than people realize. Its forecast of $230B in revenue by 2028 has the market valuing it at roughly $2T, yet Meta already generates that much revenue and is far less cyclical. x.com x.com x.com
Broadcom's significant exposure to Anthropic's AI infrastructure spending and custom AI chips adds to its growth case. Annual EPS is projected to rise nearly fourfold from $8.06 LTM to $30.38 by FY2028, while the stock trades roughly 30% below its all-time high. x.com
Financing announcements point to more accelerator demand, supporting semiconductors. About $200bn in announced Meta, Anthropic/Broadcom and SpaceX/Nvidia financing likely drives $400bn in XPU purchases. Data centers burn cash until lit, then cash flow 20-40% annually; AI spend rising from 0.1% to 0.5-1% of current payroll could balance the buildout if agents replace roles. Sustainable token demand is the bet, but smaller local models are the bigger risk, though not an immediate concern. x.com … Show more
Broadcom's demand case looks less credible because the person projecting a fourfold EPS increase by 2030 now says that demand comes from gamblers consuming tokens. The person raising roughly $100B to finance chips also warns that a lack of capital could stop the bubble. Broadcom is no longer appealing. x.com x.com
Broadcom is a buy here on a chart level combined with a catalyst from Anthropic. x.com
