My aunt Millie, God bless her, keeps asking me about “artificial intelligence.” She thinks it’s going to take over the bingo hall. Which, honestly, wouldn’t be the worst thing. Some of those women are ruthless. Anyway, it got me looking at Broadcom (AVGO +3.84%), and, well, the stock jumped almost 5% Monday. Apparently, a fellow named Stacy Rasgon at Bernstein thinks it’s a good bet. He also likes Nvidia (NVDA +2.36%), which, fine. Analysts like things. They have to. It’s in the job description.
Bernstein, as it happens, owns both stocks. Which is…comforting? Like a mechanic recommending repairs on your car while simultaneously owning the repair shop. Still, Rasgon is saying AI demand isn’t slowing, and Broadcom’s profits went up 173% last quarter. 173%. It’s a number that makes you feel vaguely unsettled, like you’ve miscalculated the tip at a restaurant. They topped $413 per share in December, but had a bit of a dip, which is to be expected. Everything dips. Even my spirits, usually around 3 PM.
He’s calling the valuation “absurdly attractive.” I’m always wary of the word “absurdly.” It feels…performative. Like someone trying to convince themselves of something. But he’s forecasting $20 per share in earnings by 2027. That’s…a lot of earnings. At $324 a share, that’s only 16 times those earnings. Which, if you’re into that sort of thing, is…reasonable. I’m more of a “hope for the best” kind of investor. It’s less stressful.
They only earned $5.12 per share last year. So, roughly 400% growth in two years? It sounds…ambitious. 100% this year, another 100% next year. It’s the kind of growth that makes you wonder what they’re not telling you. Like, are they secretly mining rare earth minerals in my aunt Millie’s bingo hall? It wouldn’t surprise me.
Even at 60 times trailing earnings, it’s…okay. I mean, it’s not cheap. But if they can maintain that 100% growth for even two years, then, yes, I suppose even 60 times earnings starts to look…almost reasonable. Almost. I still think my aunt Millie has a better handle on things. She’s been playing the numbers for fifty years. That’s a kind of artificial intelligence, too, if you think about it. A very specific, highly refined, bingo-focused AI.
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2026-03-23 18:44