AVGO Bull-Bear Debate Post-Earnings: Bulls Cite Demand Explosion and Buy-the-Dip, Bears Question Profit Sustainability

Odaily Odaily reports that following Broadcom's (AVGO) latest earnings report, the investor community is clearly divided on the company's future trajectory. Multiple bullish voices believe the company's AI business, particularly network infrastructure-related demand, remains in a phase of high-speed expansion. Conversely, some bearish views worry that current profit margins are unsustainable long-term and argue there is a lack of near-term stock catalysts.

Bullish investors and analysts generally believe that Broadcom's dominance in AI infrastructure—especially networking chips and custom ASICs—remains solid, and the short-term stock price correction is simply a market case of "looking for faults."

1. Unprecedented Order Visibility Extending to 2028:

@aleabitoreddit cited management's comments on the earnings call, stating that demand for the AI networking business is "almost impossible to satisfy," with customer order volumes being massive and order visibility extending to 2028. Based on this information, they believe Broadcom is benefiting from the ongoing expansion cycle of AI network infrastructure construction, particularly in AI Networking, and that the company's growth prospects for the coming years remain optimistic.

2. Hard Data Support Confirms Unchanged High-Growth Logic:

Addressing market concerns, qinbafrank countered with core data: Broadcom's projected Q3 total revenue is approximately $29.4 billion, significantly higher than the market's previous expectation of $28.61 billion. He argues that both the AI semiconductor business and total revenue are in absolute high growth. The current adjustment is merely due to a revenue recognition pace slower than the extreme expectations of some funds, and the core business logic remains entirely intact.

3. Valuation Correction Creates a "Golden Pit," Funds Use Leverage to Buy the Dip:

In terms of operational strategy, the bullish camp demonstrates a highly consistent "Buy the Dip" posture. Chuan Mu analyzed that along with the stock price decline, Broadcom's forward P/E ratio has fallen to around 20x. If annualizing Q4 profits and factoring in 50% growth, the long-term P/E ratio could compress to around 10x, making the valuation very attractive. He revealed that he had already bought the dip around the 60 level, utilizing a 2x leveraged tool. Investor nft_hu also explicitly stated they welcome this pullback, hoping "the correction gets a bit larger, so I can find the right opportunity to add more positions."

The Bearish Camp: 60% Profit Margin May Have Peaked, Lacking Major Near-Term Catalysts

1. Questioning the Moat of Custom Design, Suspecting Supernormal Profits are Unsustainable:

Industry analyst jukan05 stated that Broadcom's current profit margin of around 60% is approaching levels of industry leaders like Nvidia, but the company's design capabilities may not constitute an insurmountable competitive barrier. Citing the Google TPU project as an example, they pointed out that custom AI chips have proven to be successfully deployable. Therefore, large tech clients may gradually enhance their in-house design capabilities, thereby weakening Broadcom's pricing power. Under this logic, they express skepticism about whether the company's ultra-high profit margins can be maintained long-term and adopt a cautious stance on the current valuation.

2. Vacuum of Short-Term Catalysts, Technicals Face Downside Pressure:

Regarding near-term price action, trader labubu_trader provided a specific corrective forecast from a capital flow and technical perspective. They explicitly expressed a bearish bias on AVGO's short-term performance, arguing that during the vacuum period after the market digests the earnings and before the next major positive catalyst appears, the stock lacks upward momentum and will likely retrace back to the $385-$400 price range.