Morningstar’s analyst unpacks Broadcom’s current valuation, what the market is missing, and the risks investors need to watch out for.
In this bonus episode of The Morning Filter podcast, co-host Dave Sekera sits down with senior analyst William Kerwin to talk about Broadcom. They unpack the company’s three key business buckets—XPUs, networking chips, and software—and break down the company’s relationships with major customers like Alphabet, Anthropic, OpenAI, and Meta Platforms META. They also discuss the mix shift of AI spending over time, what that shift will mean for Broadcom’s business, and how Broadcom stacks up against its competitors.
Tune in to hear Morningstar’s forecasts for Broadcom’s revenue, earnings, cash flow, and margins, why we think Broadcom will maintain its wide Morningstar Economic Moat Rating despite the changing AI landscape, key assumptions behind our $650 fair value estimate, and why we believe the stock is underappreciated in the market.
Episode Highlights
0:00:00 Welcome
00:02:47 Broadcom’s AVGO key business lines.
00:05:50 XPUs, GPUs, TPUs: What’s the difference?
00:12:54 Where the relationship with Alphabet GOOGL may be headed—and what it could mean for Broadcom’s future.
00:14:26 Who Broadcom’s competitors are today and what threat they pose.
00:22:14 The potential impact of artificial intelligence regulation.
00:23:01 Morningstar’s forecasts for Broadcom’s revenue, earnings, and profit margins.
Read about topics from this episode.
Broadcom Stock Fell 3% After Earnings Despite Immense AI Chip Demand
Check out more research from William Kerwin.
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This episode is sponsored by Vanguard: https://advisors.vanguard.com/engagement/fixed-income