We just covered Billionaire Dan Loeb Pivots to AI and Sells Old Economy Stocks: His Top 7 AI Picks. Broadcom Inc. (NASDAQ:AVGO) ranks #7 (see Billionaire Dan Loeb's Top 5 AI Stock Picks).
Billionaire Dan Loeb's Stake: 50,000 Shares Valued at Approximately $15.48 Million (NEW Position)
AVGO is down about 10% over the past month and bulls say now is the time to buy it.
Broadcom's (NASDAQ:AVGO) stock got hammered after its recent earnings, despite a genuinely strong quarter — **** ysts say it's because expectations had simply run too far ahead of reality. The stock had already gained over 60% in the months leading into the print, with the market pricing in not just strong results but an upgraded outlook. What it got instead was confirmation of the same targets already communicated last quarter, with no upward revision. This was despite AI revenue growing 143% year over year, AI bookings exceeding $30 billion against shipments of only $10.8 billion, and Q3 guidance pointing to AI revenue growth of over 200% year over year.
The bigger shock came when management guided gross margins down to 74% from 77% — a 310 basis point compression in a single quarter — as the revenue mix shifts toward lower-margin hardware. This stung particularly hard because Broadcom's (NASDAQ:AVGO) CEO had explicitly told investors just last quarter that margins would hold firm.
Billionaire Dan Loeb's Stake: 50,000 Shares Valued at Approximately $15.48 Million (NEW Position)
AVGO is down about 10% over the past month and bulls say now is the time to buy it.
Broadcom's (NASDAQ:AVGO) stock got hammered after its recent earnings, despite a genuinely strong quarter — **** ysts say it's because expectations had simply run too far ahead of reality. The stock had already gained over 60% in the months leading into the print, with the market pricing in not just strong results but an upgraded outlook. What it got instead was confirmation of the same targets already communicated last quarter, with no upward revision. This was despite AI revenue growing 143% year over year, AI bookings exceeding $30 billion against shipments of only $10.8 billion, and Q3 guidance pointing to AI revenue growth of over 200% year over year.
The bigger shock came when management guided gross margins down to 74% from 77% — a 310 basis point compression in a single quarter — as the revenue mix shifts toward lower-margin hardware. This stung particularly hard because Broadcom's (NASDAQ:AVGO) CEO had explicitly told investors just last quarter that margins would hold firm.
2 months ago
