2024-07-20 02:36:18 ET
Summary
- Since I upgraded Broadcom stock from "Hold" to "Buy" in April 2024, it has gone up by nearly 21% since, beating SPY meaningfully. I think more to come.
- Q2 FY2024 financial results show revenue growth, particularly in AI, and infrastructure software segments.
- I believe that AVGO's diversified customer base and high recurring revenues from multi-year contracts position the company for sustainable growth in the coming years.
- My updated DCF valuation model indicates AVGO stock is undervalued by 38.6%, making it a good investment in the medium term.
- That's why I confirm my "Buy" rating today, calling AVGO probably the best AI-related stock pick among large-caps.
Intro & Thesis
I initiated coverage of Broadcom Inc. ( AVGO )(AVGO:CA) stock about a year ago with a "Hold" rating, which I upgraded to "Buy" in April 2024, admitting my mistake. Since my upgrade, the stock has continued to rise, gaining nearly 21% to date and outperforming the S&P 500 Index ( SP500 ) ( SPY ) by more than three times:
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Broadcom Could Be The Best AI Pick Among Large-Caps