By Tony Zhang
Publication Date: 2026-08-05 14:33:00
A developing story in semiconductors right now, one with the boldest AI narrative, but one with an unusual valuation disconnect. Broadcom is growing AI semiconductor revenue at triple-digit rates, converting nearly half of revenue into free cash flow, and guiding to one of the steepest near-term revenue accelerations in the sector, yet the stock trades at a major discount to the semiconductor group. And the charts are now starting to confirm the fundamentals on its recent breakout. Broadcom’s most recent quarter reinforced that this is not just a momentum trade. The company reported record Q2 revenue, EBITDA, and free cash flow. AI semiconductor revenue grew 143% year over year and management guided Q3 revenue up 84%, with AI semiconductor revenue expected to grow more than 200% year over year. Broadcom has been firing on all cylinders, and the valuations do not yet fully reflect that. Trade Timing & Outlook AVGO recently broke above the $400 resistance level, shifting the…