AVGO Makes My Dirty Dozen The Terrible Thirteen

My impression is that the Iranians, and especially the ghastly monster who has been the supreme leader for 36 miserable years, are in shock. Their strategy lies in ruins. There is no way to put a gloss on it, no nuclear, no economy, no friends, no idea where to go and no likelihood that anyone is going to want to associate themselves with such total failure.

Time to go for the jugular. Meanwhile, there is no gainsaying that this is a triumph for Trump. A lot of people, including me, are going to have to eat their words. I had no idea. This most unlikely and unlikeable figure is shaping up as one helluva president. Frankly, I am loving it. I have not been so happy with the direction in which the world is going since the days of Thatcher and Reagan. If Farage cannot seize the day after this.

Starmer and co., look so out of step with the way the world is going, it is hard to see any future for them but a lingering death by a thousand cuts. The Tories are already dead, and the Lib Dems are like a wraith flitting around in the shadows.

The only pity is that the next election is so far away.

The other extraordinary thought is that J.D. Vance, the president in waiting, is only 40. His power is only going to grow as the next presidential election approaches, and he will be learning from Trump’s presidency. America and the world will never be the same again. Rule by the smug, Liberal elite is gone for a generation at least.

It is eerily reminiscent of the collapse of Senatorial power in Rome in 55BC as a similar smug, self-serving elite gave way to the bizarre excesses and achievements of Imperial Rome. Julius Caesar gained power, supported by the legions and the plebs. Trump is fast becoming a darling of the military, and he already has the support of Hilary Clinton’s famous ‘deplorables’. Throw in the intellectual right, which is such a feature of America, and that is a powerful coalition to keep power for a long time.

Do the Americans need Europe? It seems not. Their economy is booming, their lead in technology is unassailable, and their disdain for the woke wetness of many Europeans is complete. It is long past time for Europe to wake up.

This chart looks super-promising. WOW! Coppock is turning higher from close to zero, the moving averages are climbing after bunching, and the latest price action looks like a chart breakout. The Trump bull market is simmering.

The contrast between the sense of purpose in America and the dithering in Britain is embarrassing. And what have the Canadians just done, elected as their president Mark Carney, the epitome of ineffectual woke wetness. He might just about cut it as the director general of the BBC, but anything more. I am not surprised that rural Canadians are demanding independence from Carney. Who wouldn’t?

AVGO, Broadcom, is a fabulous stock with an incredible record. I have recommended them many times in the past, and they look more exciting than ever. HSBC has just upgraded the shares from hold to buy with a price target of $400.

It is extraordinary how growth is accelerating at these giant US technology companies.

In our fiscal Q2 2025, total revenue was a record $15 billion, up 20% year on year. This 20% year on year growth was all organic, as Q2 last year was the first full quarter with VMware. Revenue was driven by continued strength in AI semiconductors and the momentum we have achieved in VMware. Reflecting excellent operating leverage, Q2 consolidated adjusted EBITDA was $10 billion, up 35% year on year. Now let me provide more color. Q2 semiconductor revenue was $8.4 billion, with growth accelerating to 17% year on year, up from 11% in Q1.

And of course, driving this growth was AI semiconductor revenue of over $4.4 billion, which was up 46% year on year and continues the trajectory of nine consecutive quarters of strong growth. Within this, custom AI accelerators grew double digits year on year, while AI networking grew over 70% year on year. AI networking, which is based on Ethernet, was robust and represented 40% of our AI revenue. As a standards-based open protocol, Ethernet enables one single fabric for both scale-out and scale-up and remains the preferred choice by our hyperscale customers. Our networking portfolio of Tomahawk switches, Jericho routers, and NICs is what’s driving our success within AI clusters in hyperscale.

And the momentum continues with our breakthrough Tomahawk 6 switch just announced this week. This represents the next generation 102.4 terabits per second switch capacity. Tomahawk 6 enables clusters of more than 100,000 AI accelerators to be deployed in just two tiers instead of three. This flattening of the AI cluster is huge because it enables much better performance in training next-generation frontier models through a lower latency, higher bandwidth, and lower power. Turning to XPUs or customer accelerators, we continue to make excellent progress on the multiyear journey of enabling our three customers and four prospects to deploy custom AI accelerators.

Hok Tan, CEO, Broadcom, Q2 2025, 5 June 2025

Prospects look positive for continued strong growth.

As we had articulated over six months ago, we eventually expect at least three customers to each deploy 1 million AI accelerated clusters in 2027, largely for training their frontier models. And we forecast and continue to do so a significant percentage of these deployments to be custom XPUs. These partners are still unwavering in their plan to invest despite the uncertain economic environment. In fact, what we’ve seen recently is that they are doubling down on inference in order to monetize their platforms. And reflecting this, we may actually see an acceleration of XPU demand into the back half of 2026 to meet urgent demand for inference on top of the demand we have indicated from training.

[An XPU comprises four layers: compute, memory, network I/O, and reliable packaging technology. Industry watchers call XPU the world’s largest processor.}

And accordingly, we anticipate our fiscal 2025 growth rate of AI semiconductor revenue to sustain into fiscal 2026. Turning to our Q3 outlook, as we continue our current trajectory of growth, we forecast AI semiconductor revenue to be $5.1 billion, up 60% year on year, which would be the tenth consecutive quarter of growth. 

Hok Tan, CEO, Broadcom, Q2 2025, 5 June 2025

Share Recommendations

Broadcom AVGO

Nvidia. NVDA

Strategy – Get Ready For Fireworks

My Dirty Dozen, starting as the Top Ten but now the Terrible Thirteen, are storming ahead but look full of running. These are fabulously exciting companies, growing explosively, with great stories, great charts and oodles of magic. What more could you ask?

I plan to continually add stocks with star quality, making them candidates for my list, which will grow slowly over time.

For the record, the names are: Palantir, Nvidia, MicroStrategy, Sezzle, Dave Inc., CoreWeave, Spotify, Netflix, Microsoft, Carvana, Crowdstrike, Credo Technology, and Broadcom.

I have been thinking for a while that if Nvidia could break $150, that would be exciting, and it has just happened.

This takes it a whisker past Microsoft as the world’s biggest company by market value. What a battle of the heavyweights – $4T here we come.