Broadcom Will Survive the AI Bubble, But Everyone Else Won’t. Here’s Why.

Broadcom (AVGO) has spent the year as one of the market’s favorite AI plays, with the stock price reaching its all-time high in early June. During the last couple of months, though, that started to change. The stock slid sharply after its June earnings release, when strong results still weren’t enough for a market expecting perfection. The decline continued as worries grew that AI spending had run too hot. In its August update, Goldman Sachs added to that concern, dropping Broadcom from its US Conviction List. While the firm kept its “Buy” rating, it argued that investors were starting to move into other parts of the market, not just AI. Underneath it all still sits the same fear that the AI trade is due for a fall. The problem with that fear is it treats Broadcom like every other AI chip stock, which, in my opinion, is not the case.

Why Broadcom Isn’t the Usual AI Bet

Most AI chip stocks rely…