I’ve been cautious on chip stocks in recent months,
primarily because I thought the Street was carrying inflated
expectations for a strong second half rebound. Although I can’t say Broadcom (AVGO)
has totally de-risked its fiscal second half, nor can I say that
there’s no further downside for the global economy and/or chip stock
revenue expectations, I think expectations are at a much saner level
than they were before, with chip stocks having modestly underperformed
the overall market.
I believe Broadcom shares should
trade above $300. Moreover, I think management has proven itself over
the years as one of the most realistic teams in the space with respect
to what drives value in semiconductors. With a strong presence in the
data center, as well as a host of other opportunities, I continue to
believe this is one of the best-run semiconductor companies, and now
it’s trading below fair value.
Read more here:
Broadcom Looks Undervalued After Resetting Expectations
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