Broadcom Is ‘Sitting on a Sinking Iceberg.’ Why 1 Analyst Is Warning on AVGO Stock Here.

Artificial intelligence (AI) is expected to set fresh records this year, and hyperscalers refuse to cede an inch. They continue to funnel record capital into data centers and advanced computing, determined not to trail their rivals. Into this charged setting, D.A. Davidson has initiated coverage on Broadcom (AVGO).

Analyst Gil Luria argued that the company stands on a “shrinking iceberg” as hyperscalers increasingly favor customized accelerators. He acknowledged AI application-specific integrated circuits’ (ASICs) growing relevance yet questioned the durability of Broadcom’s long-term positioning in that market.

The firm warned that the largest customers could internalize more of the AI stack over the next few years. If hyperscalers design more tooling and…