"Shares of Broadcom ( NASDAQ:AVGO) have entered a bit of a consolidation phase (going sideways in the past six months), and while the name is down just over 18% from its all-time highs, I wouldn't yet hit the panic button, especially as the Magnificent Seven look to spend heavily in another year of the AI boom. The revolution is alive and well, and many smart leaders continue to think the efforts are going to pay off."
"Indeed, if there wasn't a reasonable chance of a solid return, the heavyweight tech titans probably wouldn't be so willing to commit magnitudes of investment that would be enough to make shareholders woozy enough to throw in the towel on a stock. Indeed, the CapEx drop in heavy AI spenders has been the talk of the town so far in 2026. And it's unclear if the selling is over with."
Shares of Broadcom have consolidated sideways over six months and are roughly 18% below all-time highs. Heavy AI spending by the Magnificent Seven is driving large capital expenditures and keeping the AI revolution active. Hyperscalers increasingly design custom silicon for AI inference to improve efficiency and reduce long-term costs, which could shift spending away from GPU-dominant suppliers. Broadcom is positioned to capture early revenue from that custom silicon trend and may benefit as hyperscalers spend heavily despite potential supply-chain bottlenecks in energy, memory, and storage. Risks include possible AI market excesses and ongoing selling pressure.
Read at 24/7 Wall St.
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