Broadcom Sinks After Disappointing AI Chip Outlook
Speakers
Mandeep Singh
— Senior Analyst, Bloomberg Intelligence
Summary
Mandeep Singh argues Broadcom's selloff is overdone given its strong growth and benefit from Anthropic's contract, while CrowdStrike's lack of AI agent exposure and rich valuation make it unattractive.
- Broadcom shares fell after AI chip outlook deemed underwhelming.
- Mandeep Singh says Broadcom's print was solid with 60%+ revenue growth.
- Anthropic's $200 billion contract expected to benefit Broadcom.
- CrowdStrike shares down after modest sales guidance.
- CrowdStrike lacks exposure to surging AI agent spending.
- Market disappointed by companies not raising guidance enough.
- Analyst recommends buying Broadcom on the dip.
- Analyst advises avoiding CrowdStrike due to valuation and weak AI agent story.
Trade Ideas
Strong growth, buy the dip.
Broadcom's print was solid with top line growing over 60% and will continue for 2-3 years. The selloff is due to high expectations, not fundamentals. The Anthropic $200 billion contract should benefit Broadcom as the maker of Google TPUs. The stock is a buy on the dip.
Avoid due to lacking AI agent exposure.
CrowdStrike's modest sales guidance and lack of exposure to the AI agent spending wave, which is 80% of incremental spend, disappoints investors given the rich valuation. The stock is to be avoided.
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