Otto Analytics
Frontier Infrastructure · Conviction Research
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July 4, 2026
Investment Memorandum · Preview

AVGOBroadcom Inc.

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Thesis

Broadcom is the indispensable engineering partner for the shift from merchant GPUs to custom hyperscaler AI silicon, and it just added OpenAI to a roster that already includes Google, Meta, and ByteDance. Underneath the AI story sits a $33B-a-year free cash flow machine and a VMware software annuity with switching costs few enterprises can escape. Revenue compounded 48% last quarter at a 69% gross margin. The engine is not in doubt. After a 25% correction to the 200-day line, what you pay for it is.

The rest of the note answers the price question.
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