Broadcom is an attractive buy due to low valuation (down 29%, 19.6x forward PE) and strong growth potential in custom ASICs as customers diversify away from Nvidia.

Well, I'd go straight to the AI market . I'd talk about Broadcom. Right now, Broadcom is valued at $1.6 trillion , so it's not a small company anymore. It's definitely a stock that has benefited a lot from this expansion in AI.

You could call Broadcom—and I wouldn't call it Nvidia's competitor because Nvidia makes GPUs, while Broadcom, among other things, specializes in custom silicon, i.e., application-specific integrated circuits (ASICs).

So, they serve companies like Meta, OpenAI, Anthropic, or Google's Tensor Processors, for example .

And according to JPMorgan , starting in 2027, application-specific integrated circuits (ASICs) are expected to outperform GPUs. This is certainly interesting , especially considering that Nvidia is likely to continue growing at a rapid pace for the foreseeable future, even though some of its biggest customers have become, or may become, competitors.

But you might think Broadcom's stock is going to rise significantly this year, but it's actually quite low. It's down about 29% right now. The stock isn't expensive based on its forward earnings multiples.

It's at 19.6 times forward earnings, with a price-to-earnings- to-growth (PEG) ratio of 0.5. So, it's definitely not an overpriced stock .

They've also given us some medium- term targets. For fiscal year 2026, they expect AI revenue of around $58 billion. For 2027, that revenue is expected to jump to $115 billion.

And for fiscal year 2028, it's expected to more than double again to $230 billion . By then, they expect non-GAAP earnings per share of around $30.

So, it's It's not the cheapest stock on the market, but they're not just giving us a one-year forecast , they're giving us a two-year forecast. And if they deliver , it's certainly not too expensive, is it?

We're talking about a company that's projected to double its revenue next year, and then double that revenue again the following year.

Of course, if there's a significant slowdown in AI infrastructure development and spending, they might not achieve that, but given their track record, the fact that they're providing these medium- term forecasts means they see what's going to happen in their business at least until 2028.

And look, if they can achieve 100% growth in 2028, I don't expect growth to drop to 10% by 2029. So, there's still a lot of growth to be expected through to the end of this decade, which some people see as a long way off when they think about 2030.

I think in the world we live in now, 2030 isn't far off at all. It's a very interesting name, and it's now high up my list of interests.

Is this one of those companies that would be a counter-bet to [Company Name]? Nvidia? I mean, you know, they have the same enablers. But if we move to a world we've talked about a lot on the channel; where it was five years ago, when ChatGPT launched, the world of Nvidia, the company that did everything.

They did all the training and heuristics, except for what fell under the Alphabet umbrella. Now, of course, you have Alphabet with its tensor processing units (TPUs). By the way, Anthropic is training on TPUs.

You have OpenAI, which is developing its own chips under the name " Halabino." You know, it seems like everyone is developing their own chips, and these companies are so big they do n't want to be controlled by Jensen Huang.

They don't want to pay an 80% markup to Nvidia. So, the way to move that in internally is to design these application-specific integrated circuits (ASICs), and that's actually in Broadcom's favor.

It seems like this is an enabler that could last a long time, even if Nvidia's business slows down, which is an interesting situation for them.

Yes, I think that's also why we're seeing this growth. The big picture is that we're in the third year of this expansion. But again, if you look at Nvidia, it's a $5 trillion company that's also growing at ...how much?

90%. So, they can win, Nvidia can win, but they look poised to achieve even more, not just because their revenue base is smaller, but because their biggest customers are some of the biggest companies on the planet.

Now, these companies, most of them, use these chips for internal use. They also all source Nvidia GPUs, because the majority of the ecosystem, let's say, has been built around Nvidia's infrastructure.

So, for external companies, they still want to continue working on Nvidia's infrastructure. But, for me, let's say it's an option where you're still looking for a lot of growth, I think that's also why a lot of investors are looking at AMD, because AMD is also finally seeing that growth acceleration , because they have a good product that can compete with what Nvidia offers.

So, yes, I think you're right that if, let's say, Nvidia's business slows down, which there are no indications of happening, then... Right now, Broadcom could see a significant acceleration in growth .

Yes, I like where they're positioned . I like companies that have the size and power to, you know, build an alternative outside of Nvidia.