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  3. Broadcom (AVGO)

Broadcom (AVGO)

Scheduled Pinned Locked Moved Investments and Portfolios
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  • 2 Offline
    2 Offline
    2BToo
    wrote on last edited by
    #4

    Thanks Adam. MEDP has dropped over the last six months. If we/you made (an impressive) 102% then the holding must have started a while ago.

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    • A Offline
      A Offline
      Adam Kay
      Global Moderator
      wrote on last edited by
      #5

      We paid 165 initially

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      • A Offline
        A Offline
        Adam Kay
        Global Moderator
        wrote on last edited by
        #6

        That gain is point to point. The actually gain will be more because we were selling it in the 400’s too

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        • A Adam Kay

          We recently acquired Broadcom-AVGO and Oracle ORCL into the technology portfolio(they may also be held elsewhere), selling PANW (+85%) and MEDP (102%). Normal emails will go out in due course.

          S Offline
          S Offline
          S6PNJ
          wrote on last edited by
          #7

          @Adam-Kay Did these get swapped out in the end? I haven't seen any email referring to this - the last email I've had from Cobens was the one sent on 28 March - Spring Forecast 2025. Thanks!

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          • R Offline
            R Offline
            Ronski
            wrote on last edited by
            #8

            I took post number 3 above to mean they have been purchased, and the others sold, thus updated my spreadsheet.

            I also have not had an email relating to the sale/purchase.

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              Adam Kay
              Global Moderator
              wrote on last edited by
              #9

              The post is correct. We haven't 'released' the email yet. Probably will in May.

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              • R Offline
                R Offline
                Ronski
                wrote on last edited by
                #10

                Why would you wait that long to release the email?

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                • A Offline
                  A Offline
                  Adam Kay
                  Global Moderator
                  wrote on last edited by
                  #11

                  Hi Ron,

                  Because our quarter end official meeting is on Friday. Official comms will be the following week. Regards
                  Adam

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                  • A Offline
                    A Offline
                    Adam Kay
                    Global Moderator
                    wrote last edited by
                    #12

                    Broadcom will report earnings on Thursday after the close. I will provide a summary of expectations and recently highlights, tomorrow.

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                    • A Offline
                      A Offline
                      Adam Kay
                      Global Moderator
                      wrote last edited by
                      #13

                      AVGO is due to report Q2 earnings tomorrow. Here is what is expected. They will almost certainly beat and guide higher. We will be watching for comments around their ASICS segment and VMWare. A fantastic business, acquired at a fair price.

                      We acquired the stock on 18 March @ $193 and today it sits at an all time high of $260.

                      Screenshot 2025-06-04 at 16.59.55.png

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                        Adam Kay
                        Global Moderator
                        wrote last edited by Adam Kay
                        #14

                        A solid result from AVGO, beating expectations and guiding higher-ahead of consensus expectations. Asics is growing dramatically with the growth trend continuing through 2026.

                        Q2 FY2025 Results:
                        Revenue: $15.004 billion, up 20% year-on-year, meeting estimates of $14.99 billion.
                        AI Semiconductor Revenue: $4.4 billion, up 46% year-on-year.
                        Infrastructure Software Revenue: $6.6 billion, up 25% year-on-year, exceeding guidance of $6.5 billion.
                        Semiconductor Solutions Revenue: $8.4 billion, up 17% year-on-year.
                        Adjusted EBITDA: $10.0 billion, up 35% year-on-year (67% of revenue).
                        Free Cash Flow: $6.4 billion, up 44% year-on-year (43% of revenue).
                        Capital Allocation: Paid $2.8 billion in dividends and repurchased $4.2 billion in shares.
                        Q3 FY2025 Guidance:
                        Revenue: $15.8 billion, up 21% year-on-year, slightly above estimates of $15.72–$15.79 billion.
                        AI Semiconductor Revenue: $5.1 billion, up 60% year-on-year.
                        Semiconductor Revenue: $9.1 billion, up 25% year-on-year.
                        Infrastructure Software Revenue: $6.7 billion, up 16% year-on-year.
                        Adjusted EBITDA: Expected at 66% of revenue.
                        Management Insights
                        Hock E. Tan, CEO, highlighted, “Our record Q1 and Q2 revenues of $15.004 billion reflect strong AI demand and VMware momentum.” He noted AI networking (Ethernet-based) contributed 40% of AI revenue and introduced the Tomahawk 6 switch, enabling efficient AI clusters with 102.4 terabits per second capacity. Tan projected “accelerated XPU demand in late 2026 for inference and training.” Kirsten M. Spears, CFO, added, “Gross margins of 79.1% in Q1 and 79.4% in Q2 exceeded forecasts due to a favourable product mix.”
                        Outlook and 2026 Expectations
                        Broadcom anticipates continued growth, with Q3 revenue guidance of $15.8 billion and AI semiconductor revenue expected to sustain its FY2025 growth rate into FY2026. Management expressed confidence in organic growth, supported by innovations like Tomahawk 6 and strong VMware Cloud Foundation adoption (over 85% of top 10,000 customers).
                        Risks and Challenges
                        Non-AI semiconductor revenue remains sluggish, with slow recovery.
                        Free cash flow is impacted by VMware acquisition debt interest and higher taxes.

                        The stock is at an all time high so we would expect a bit of churn as recently macro events play out and the stock forms a solid base to spring board to the next level. A fantastic business that has a very bright future.

                        Screenshot 2025-06-06 at 07.57.39.png

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                        The value of your investments can go down as well as up, and you may get back less than you invested.

                        Cobens a trading name of Astute Financial Management UK Limited is authorised and regulated by the Financial Conduct Authority. Registered Address: 4th Floor Peek House, 20 Eastcheap, London, EC3M 1EB. Registered in England and Wales No. 5850981.

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