A broader AI correction has gripped the stock market, resulting in high-growth companies trading at compelling valuations.
Broadcom (NASDAQ: AVGO) was approaching $500 per share earlier in the year, but has now dropped by more than 20% from its all-time high
The AI chipmaker didn’t do anything wrong. Its fundamentals are actually improving, and long-term tailwinds continue to build. High-quality stocks can get caught in the crossfire from pessimistic investors, and that provides a great opportunity for people who buy the dip.
Custom chips are becoming more important Nvidia was the main focus early, with its graphics processing units (GPUs) handling general training tasks quite effectively. However, Broadcom’s custom chips are better for AI inference and the optimization of very specific tasks, both of which are gaining importance. Just as Nvidia is the undisputed leader of the GPU industry, Broadcom has a comfortable lead over its competitors in the ASIC industry.