Lively debate follows AVGO earnings report: bulls insist on explosive demand and buying the dip, while bears question the sustainability of profits

Odaily reports that Broadcom (AVGO) has released its latest financial results, leading to a clear divergence of views in the investor community regarding the company's future trajectory. Several bullish commentators believe that the company's AI business—especially its network infrastructure segment—is still undergoing rapid expansion. On the other hand, some bearish perspectives are concerned that the current level of profit margin will be difficult to maintain over the long term and argue that there is a lack of new short-term catalysts for the stock price.

Many investors and analysts generally believe that Broadcom’s dominance in AI infrastructure—particularly in network chips and custom chips—remains solid. They view the recent share price correction as the market “nitpicking.”

1. Unprecedented order visibility stretching to 2028:

@aleabitoreddit cited management’s statements in the earnings call, saying AI networking business demand is “almost impossible to meet” and that customer order sizes are huge—with order visibility now extending out to 2028. Based on this, they believe Broadcom is benefiting from an ongoing cycle of AI network infrastructure expansion, especially in AI Networking, and that the company’s growth prospects remain optimistic for the next few years.

2. Strong data backing, high-growth thesis unchanged:

Addressing market concerns, qinbafrank presented core data to refute them: Broadcom’s projected total revenue for the third quarter is about $29.4 billion, significantly higher than the previous market expectation of $28.61 billion. In their view, whether in the AI semiconductor business or in total revenue, the company is in a phase of absolute high-speed growth. The current adjustment is only because revenue recognition is slower than some capital’s overly aggressive expectations—Broadcom’s core business logic remains completely intact.

3. Valuation pullback creates a “golden pit,” funds buying the dip with leverage:

In terms of trading strategy, most bulls show a highly unified “buy the dip” attitude. Analyst Chuanmu notes that as the share price falls, Broadcom’s dynamic P/E ratio has fallen to around 20x. If one annualises Q4 profits and includes 50% growth, its forward P/E may even compress to around 10x, making the valuation very attractive. He revealed he had bought the dip around 60 and used 2x leveraged long positions. Investor nft_hu also made it clear he welcomes this correction, stating “I hope the pullback gets bigger, I’ll look for a good opportunity to add more.”

Bearish side: 60% profit margin may have peaked, short-term lacks major positive catalysts

1. Questions about custom design moat; super high profits may be hard to sustain:

Industry analyst jukan05 points out that Broadcom’s current profit margin of about 60% is already near the level of industry leaders like NVIDIA, but questions whether the company’s design capabilities constitute an irreplaceable competitive moat. Using the Google TPU project as an example, he notes that custom AI chips have been proven to succeed, so in the future large technology customers could gradually strengthen their independent design capabilities—thus weakening Broadcom’s bargaining power. Based on this, he doubts whether such high profit margins can be maintained long-term, and is cautious about current valuations.

2. Short-term catalyst vacuum, technicals facing downward pressure:

Regarding the short-term outlook, trader labubu_trader gave a specific forecast based on capital flows and technical indicators. He expressed a bearish attitude towards AVGO in the short term, arguing that after the market digests the earnings report and before the next major positive catalyst appears, the stock price will lack upward momentum—so it’s highly likely to retrace all the way down to the $385–$400 range.