- AVGO is the author’s preferred semiconductor investment over NVDA: roughly 17x FY2027 adjusted earnings despite consensus implying about 65% revenue and EPS growth from FY2026.
- Custom AI accelerators and Ethernet networking let Broadcom monetize hyperscaler buildouts without displacing NVIDIA; AI semiconductor revenue is projected at $58B in FY2026, $115B in FY2027 and potentially $230B in FY2028.
- Multi-year commitments involving Google, Anthropic, OpenAI and Meta support deployment visibility, while Apple’s announced agreement exceeding $30B adds non-AI demand; FY2026 Q3 free cash flow was $13.7B on $29.6B revenue.
- The thesis depends on AI spending, customer deployments, pricing and margin retention; concentration, internal silicon, competition and valuation compression could undermine the projected earnings growth, though the author finds risk/reward compelling.
Investment pitches
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78 69 - CRWV’s bull case is that infrastructure cash flow can outgrow its financing burden: fixed-rate interest need not rise with revenue as utilization and earnings increase.
- Long-term take-or-pay commitments and success-based capex provide revenue visibility; July 2026 pricing rose approximately 25% across SKUs, supporting management’s cost pass-through argument.
- Reported weighted-average debt cost fell nearly 300 basis points over the preceding year, while NVIDIA’s agreement to buy up to $6.3 billion of qualifying unsold capacity through 2032 offers a limited demand backstop.
- The thesis remains conditional: higher absolute interest expense, customer concentration, overbuilding, refinancing pressure, or weak utilization could prevent infrastructure returns from covering the capital intensity.