Broadcom: AI Demand Is Strong, But Is That Enough?

Broadcom is a Buy, leveraging its key role as an AI infrastructure supplier with accelerating AI semiconductor demand and robust free cash flow generation. AVGO's AI semiconductor revenues are expected to reach $115 billion in FY2027, with management emphasizing financing as the main bottleneck, not demand. Recent $42 billion financing partnerships and a focus on institutional funding enable AVGO to support hyperscaler and frontier AI customers without overextending its balance sheet.