ContextBroadcom Inc. (AVGO) has experienced a significant correction, trading at $323.24. This is roughly 35% down from …

Context

Broadcom Inc. (AVGO) has experienced a significant correction, trading at $323.24. This is roughly 35% down from its all-time high of $495. The broader semiconductor sector has entered a gruesome corrective phase due to rising anxieties over AI financing, infrastructure bottlenecks (such as land and power shortages), and the durability of massive tech capex.

My trade

Given the stock is trading deep within a firm institutional support zone between $320 and $330, my trade strategy shifts to accumulating long equity exposure at an aggressive discount.

• The Setup: Sell out-of-the-money cash-secured put options or purchase direct equity blocks at current levels ($323–$325).

• The Math: Wall Street maintains a strong consensus with an average 12-month target of $527.20. Morningstar models its fair value at $650 based on a conservative 23x multiple on its projected 2028 EPS of $30+. Trading at roughly 17.5x trailing cash flows, the current entry provides a 25%+ margin of safety relative to its intrinsic value.

Risk Management: Position sizes will be capped at 4% of the total portfolio to account for high customer concentration among Tier-1 hyperscalers (Google, Meta, Anthropic) and capital constraints on data center rollouts.

Takeaway

Broadcom is the premier AI infrastructure buy hiding in plain sight. While the market is treating AVGO like a high-risk cyclical chip asset, it is actually a highly diversified cash engine anchored by high-margin, recurring software revenues via VMware and an unbeatable, multi-generational custom silicon roadmap. The recent 35% haircut is a symptom of macro market exhaustion, not operational failure. For patient investors, this mismatch between short-term sentiment and guaranteed multi-year AI order books offers a textbook entry point.