June 4 Daily Discussion: Broadcom Beat. Wall Street Still Sold.
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AI Still Has Room
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Everyone is debating whether to buy AVGO on the dip. Most of them are asking the wrong question.
The right question isn't "is AVGO cheap at $430?" It's "is the custom silicon moat still intact — and who is most likely to erode it?"
Let's be precise about the moat. Broadcom's business model is fundamentally different from Nvidia's. Nvidia sells the same H100/B200 to everyone. Broadcom co-designs a unique XPU for each hyperscaler client — Google's TPU, Meta's MTIA, ByteDance's internal silicon, and now chips for Anthropic and OpenAI. Each design takes 18–24 months of co-engineering. Once the chip is in production, the customer can't switch without losing 2 years of development time and rebuilding from scratch. That's an extraordinarily high switching cost.
The moat is real. But it has three genuine vulnerabilities.
First: insourcing risk. Amazon already moved Trainium 3 fully in-house. Microsoft is deepening Maia 2 without Broadcom involvement. If Meta or Google decides to follow AWS and build its own networking + accelerator stack entirely, Broadcom loses a customer representing 15–20% of revenue with no replacement pipeline.
Second: concentration. Five customers represent roughly 50% of Broadcom's semiconductor revenue. That's not a diversified business — it's a concentrated bet on the continued AI capex commitments of five specific companies. If any one of them hits a capex cycle pause, the impact is immediate and disproportionate.
Third: the software miss this week. Infrastructure software — the VMware/enterprise stack — came in $140M light. That's 0.6% of revenue. But the trend matters more than the number. If software is plateauing while AI chips soar, the "AI + software compounding" re-rating thesis loses one of its two legs.
The bull case survives all three of these risks — for now. Google's supply agreement runs through 2031. Meta's MTIA roadmap still relies on Broadcom networking even if compute moves in-house. Anthropic and OpenAI are new customers adding to the revenue base. And the Q3 guide of $16B at 200% YoY growth is, by any measure, extraordinary.
But at 87x earnings, "survives the risks" isn't enough. You need "dominates despite the risks." That's a different standard. And that's why today's NFP — and whether it gives AVGO a multiple-expansion tailwind from rate relief — matters as much as the fundamental story.
The right question isn't "is AVGO cheap at $430?" It's "is the custom silicon moat still intact — and who is most likely to erode it?"
Let's be precise about the moat. Broadcom's business model is fundamentally different from Nvidia's. Nvidia sells the same H100/B200 to everyone. Broadcom co-designs a unique XPU for each hyperscaler client — Google's TPU, Meta's MTIA, ByteDance's internal silicon, and now chips for Anthropic and OpenAI. Each design takes 18–24 months of co-engineering. Once the chip is in production, the customer can't switch without losing 2 years of development time and rebuilding from scratch. That's an extraordinarily high switching cost.
The moat is real. But it has three genuine vulnerabilities.
First: insourcing risk. Amazon already moved Trainium 3 fully in-house. Microsoft is deepening Maia 2 without Broadcom involvement. If Meta or Google decides to follow AWS and build its own networking + accelerator stack entirely, Broadcom loses a customer representing 15–20% of revenue with no replacement pipeline.
Second: concentration. Five customers represent roughly 50% of Broadcom's semiconductor revenue. That's not a diversified business — it's a concentrated bet on the continued AI capex commitments of five specific companies. If any one of them hits a capex cycle pause, the impact is immediate and disproportionate.
Third: the software miss this week. Infrastructure software — the VMware/enterprise stack — came in $140M light. That's 0.6% of revenue. But the trend matters more than the number. If software is plateauing while AI chips soar, the "AI + software compounding" re-rating thesis loses one of its two legs.
The bull case survives all three of these risks — for now. Google's supply agreement runs through 2031. Meta's MTIA roadmap still relies on Broadcom networking even if compute moves in-house. Anthropic and OpenAI are new customers adding to the revenue base. And the Q3 guide of $16B at 200% YoY growth is, by any measure, extraordinary.
But at 87x earnings, "survives the risks" isn't enough. You need "dominates despite the risks." That's a different standard. And that's why today's NFP — and whether it gives AVGO a multiple-expansion tailwind from rate relief — matters as much as the fundamental story.
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Empty_Somewhere_2135:Volatility like this is where I park cash and watch AVGO. If NFP softens and rates ease, I’ll nibble on dips, but I’m hedging with a small NVDA collar. The moat’s there, just not bulletproof.
car12703:The multiple here is hostage to the labor market and rates. If NFP stays soft into summer, the Fed might pause, and AVGO could get a tailwind. But if capex slows, even a 10% drop in hyperscaler spend hits margins fast.
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Federal Reserve Warsh June 2026 press conference 或 Fed interest rate decision June 2026
Today's NFP isn't just a jobs number. It's the opening argument in a trial that concludes on June 17.
Here's the full context of what Warsh inherits at his first major press conference as Fed Chair:
Inflation: PCE at 3.8% YoY in April, above the 2% target. PPI running at 6.0%. Not cooling fast enough.
Labor market: April +115K, beating 64K consensus by nearly 2x. ADP May at 122K. The market is resilient despite the Iran conflict, oil volatility, and rate uncertainty.
Oil: WTI oscillating between $88–93 depending on Iran headlines. Goldman's adverse scenario still has Brent at $115 if Hormuz reopens slowly.
AI capex: Broadcom guided $16B in AI chips next quarter. Dell has $24.4B in AI orders. The private sector is spending aggressively on AI infrastructure regardless of rates.
The Fed's dilemma: the traditional "soft jobs = rate cut" logic doesn't apply cleanly when inflation is still running hot and AI-driven capex is keeping the economy above stall speed. Warsh has to navigate a press conference where every answer risks either spooking the bond market or emboldening the equity market.
Today's NFP sets the tone. If it comes in soft, Warsh can be mildly dovish. If it's hot, he has to be hawkish — and the market re-prices June 17 from a "hold" to a potential "hawkish hold with rate hike optionality."
That distinction is worth 200–300 points on the S&P 500.
Today's NFP isn't just a jobs number. It's the opening argument in a trial that concludes on June 17.
Here's the full context of what Warsh inherits at his first major press conference as Fed Chair:
Inflation: PCE at 3.8% YoY in April, above the 2% target. PPI running at 6.0%. Not cooling fast enough.
Labor market: April +115K, beating 64K consensus by nearly 2x. ADP May at 122K. The market is resilient despite the Iran conflict, oil volatility, and rate uncertainty.
Oil: WTI oscillating between $88–93 depending on Iran headlines. Goldman's adverse scenario still has Brent at $115 if Hormuz reopens slowly.
AI capex: Broadcom guided $16B in AI chips next quarter. Dell has $24.4B in AI orders. The private sector is spending aggressively on AI infrastructure regardless of rates.
The Fed's dilemma: the traditional "soft jobs = rate cut" logic doesn't apply cleanly when inflation is still running hot and AI-driven capex is keeping the economy above stall speed. Warsh has to navigate a press conference where every answer risks either spooking the bond market or emboldening the equity market.
Today's NFP sets the tone. If it comes in soft, Warsh can be mildly dovish. If it's hot, he has to be hawkish — and the market re-prices June 17 from a "hold" to a potential "hawkish hold with rate hike optionality."
That distinction is worth 200–300 points on the S&P 500.
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Ok_Manufacturer2112:Seen this movie: sticky inflation, resilient labor, then a pause. I'd expect choppy moves, not clear direction, until wage growth cools.
ChxmpV2:Why does every Fed talk move SPY 200 points?
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Everyone is debating whether AVGO's selloff is a buying opportunity. Here's the question they should actually be asking: is the custom silicon model structurally defensible?
The answer is yes — but with one critical caveat. Custom chips like Broadcom's XPUs are co-engineered directly with the hyperscaler. Google's TPU isn't just "powered by Broadcom" — it's designed jointly, with roadmaps locked in years ahead. That creates switching costs that make AMD or even Nvidia almost irrelevant as competitors in this specific segment. The Google supply agreement reportedly runs through 2031.
The risk isn't competition. It's insourcing. Amazon already moved Trainium 3 fully in-house. Microsoft is deepening Maia 2. If Meta or ByteDance decides to follow, Broadcom loses a customer that represents 15–20% of revenue with no replacement on the shelf.
The selloff isn't telling you the thesis is broken. It's telling you the market finally started pricing that tail risk.
The answer is yes — but with one critical caveat. Custom chips like Broadcom's XPUs are co-engineered directly with the hyperscaler. Google's TPU isn't just "powered by Broadcom" — it's designed jointly, with roadmaps locked in years ahead. That creates switching costs that make AMD or even Nvidia almost irrelevant as competitors in this specific segment. The Google supply agreement reportedly runs through 2031.
The risk isn't competition. It's insourcing. Amazon already moved Trainium 3 fully in-house. Microsoft is deepening Maia 2. If Meta or ByteDance decides to follow, Broadcom loses a customer that represents 15–20% of revenue with no replacement on the shelf.
The selloff isn't telling you the thesis is broken. It's telling you the market finally started pricing that tail risk.
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PatientPsy:Everyone assumes co-design equals monopoly; hyperscalers can pivot.
LonelyConely:Everyone cheering AVGO; I’m not convinced the risk is priced.
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Most people read Trump's AI executive order as a headline. Here's the actual mechanism and who wins.
The order does three concrete things: it asks AI companies to voluntarily submit frontier models for government review 30 days before release; it directs agencies to build an "AI cybersecurity clearinghouse"; and it accelerates federal procurement of AI systems. Beneath those three lines is a $30 billion Pentagon AI budget that is now actively looking for deployment vehicles.
The direct beneficiary map: Palantir (PLTR) is already embedded — its Maven AI system compressed Iran targeting cycles from days to minutes and is operationally live. CrowdStrike (CRWD) and Palo Alto (PANW) benefit from the cybersecurity hardening mandate. Microsoft (MSFT) and Oracle (ORCL) are the cloud infrastructure layer for most federal AI deployments. Booz Allen Hamilton (BAH) is the systems integrator that translates policy into contracts.
The less obvious beneficiary: Anthropic. The order was partly triggered by security concerns over models like Claude that can exploit vulnerabilities at unprecedented speeds — the Pentagon is simultaneously designating it a "supply-chain risk" and remaining its largest government AI user. That tension doesn't resolve cleanly, but it guarantees Anthropic stays central to federal AI policy for years.
This isn't a one-day trade. It's a multi-year government procurement cycle that most equity models haven't fully priced.
The order does three concrete things: it asks AI companies to voluntarily submit frontier models for government review 30 days before release; it directs agencies to build an "AI cybersecurity clearinghouse"; and it accelerates federal procurement of AI systems. Beneath those three lines is a $30 billion Pentagon AI budget that is now actively looking for deployment vehicles.
The direct beneficiary map: Palantir (PLTR) is already embedded — its Maven AI system compressed Iran targeting cycles from days to minutes and is operationally live. CrowdStrike (CRWD) and Palo Alto (PANW) benefit from the cybersecurity hardening mandate. Microsoft (MSFT) and Oracle (ORCL) are the cloud infrastructure layer for most federal AI deployments. Booz Allen Hamilton (BAH) is the systems integrator that translates policy into contracts.
The less obvious beneficiary: Anthropic. The order was partly triggered by security concerns over models like Claude that can exploit vulnerabilities at unprecedented speeds — the Pentagon is simultaneously designating it a "supply-chain risk" and remaining its largest government AI user. That tension doesn't resolve cleanly, but it guarantees Anthropic stays central to federal AI policy for years.
This isn't a one-day trade. It's a multi-year government procurement cycle that most equity models haven't fully priced.
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Sea-Ingenuity-9508:Trend looks intact: PLTR and CRWD are already up on this, and PANW/MSFT keep stacking federal contracts. If the clearinghouse ramps, we’ll see more buybacks and guidance hikes, which momentum traders should chase.
Summerdaysengineer:Procurement cycles plus higher rates usually mean slower deployments.
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Step back from AVGO for a moment and look at the full picture of this earnings season. Something structural has changed, and it matters for how you position the next six months.
The companies that got rewarded this cycle — Snowflake (+36%), Dell (+40%), PANW (+10%) — all shared one characteristic: they delivered results that were genuinely surprising relative to lowered expectations. SNOW had been left for dead. DELL's AI server revenue growing 757% was not in anyone's model. PANW was recovering from sector-wide trauma.
The companies that got punished — ZS (−30%), CRM (flat), AVGO (−6–15%) — were priced for perfection going in. ZS was expected to perform. CRM was expected to grow Agentforce. AVGO was expected to blow out AI numbers. There was no room for anything less than extraordinary.
This tells you something important about where we are in the cycle: the easy money from "AI = buy everything" is over. We are now in the phase where you need to identify which companies have underpriced expectations — not just strong fundamentals. The alpha is in the gap between what the market has already priced and what the business can actually deliver.
For the rest of 2026, the most important question isn't "is AI growing?" It's "what does the market think AI is doing, and where is it wrong?"
The companies that got rewarded this cycle — Snowflake (+36%), Dell (+40%), PANW (+10%) — all shared one characteristic: they delivered results that were genuinely surprising relative to lowered expectations. SNOW had been left for dead. DELL's AI server revenue growing 757% was not in anyone's model. PANW was recovering from sector-wide trauma.
The companies that got punished — ZS (−30%), CRM (flat), AVGO (−6–15%) — were priced for perfection going in. ZS was expected to perform. CRM was expected to grow Agentforce. AVGO was expected to blow out AI numbers. There was no room for anything less than extraordinary.
This tells you something important about where we are in the cycle: the easy money from "AI = buy everything" is over. We are now in the phase where you need to identify which companies have underpriced expectations — not just strong fundamentals. The alpha is in the gap between what the market has already priced and what the business can actually deliver.
For the rest of 2026, the most important question isn't "is AI growing?" It's "what does the market think AI is doing, and where is it wrong?"
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kawa_yt332:SNOW +36%, DELL +40% on surprise, but CRM flat and ZS -30%. If AI growth is real, why such divergence? Feels like pricing power, not demand.
chatofwallst:Everyone’s cheering SNOW and DELL, but I’m skeptical this trend sticks. Data center capex is slowing, enterprise budgets are tight, and AI workloads may not scale as promised. PANW’s recovery feels fragile without broader demand.
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While everyone was watching AVGO last night, a quieter but potentially more important story developed: Iran suspended nuclear talks, and oil ticked back toward $93.
This matters more than most people realize. The entire May rally — Nasdaq +8%, S&P +5%, WTI −17% — was built on one macro assumption: that the Iran conflict was moving toward resolution and energy prices would remain subdued. That assumption powered the inflation relief narrative, which powered the Fed-will-eventually-cut narrative, which powered the multiple expansion in tech.
If that assumption cracks — if the ceasefire frays, if oil re-accelerates toward $100 — the entire macro backdrop reverses. You get higher energy costs, stickier inflation, a more hawkish Fed path, and compressed multiples in exactly the growth stocks that have been carrying the market. Goldman's adverse scenario has Brent hitting $115 if Hormuz reopening is delayed and Gulf production losses persist. The IMF has already revised 2026 global growth down to 3.1%, naming Iran as the primary driver.
Today's NFP report lands into this backdrop. A strong jobs number doesn't help — it raises rate fears. A weak number raises recession fears. The clean scenario (in-line data, Iran talks resume, oil stabilizes) is possible but is no longer the base case. For the first time since early May, the market has multiple things going wrong simultaneously.
The AI narrative is powerful. But it doesn't exist outside of the macro.
This matters more than most people realize. The entire May rally — Nasdaq +8%, S&P +5%, WTI −17% — was built on one macro assumption: that the Iran conflict was moving toward resolution and energy prices would remain subdued. That assumption powered the inflation relief narrative, which powered the Fed-will-eventually-cut narrative, which powered the multiple expansion in tech.
If that assumption cracks — if the ceasefire frays, if oil re-accelerates toward $100 — the entire macro backdrop reverses. You get higher energy costs, stickier inflation, a more hawkish Fed path, and compressed multiples in exactly the growth stocks that have been carrying the market. Goldman's adverse scenario has Brent hitting $115 if Hormuz reopening is delayed and Gulf production losses persist. The IMF has already revised 2026 global growth down to 3.1%, naming Iran as the primary driver.
Today's NFP report lands into this backdrop. A strong jobs number doesn't help — it raises rate fears. A weak number raises recession fears. The clean scenario (in-line data, Iran talks resume, oil stabilizes) is possible but is no longer the base case. For the first time since early May, the market has multiple things going wrong simultaneously.
The AI narrative is powerful. But it doesn't exist outside of the macro.
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Empty_Somewhere_2135:Seen this movie: energy spikes compress growth multiples. I'm trimming cyclicals and rotating into cash, then waiting for a pullback.
smooth_and_rough:AVGO fading on oil headlines; quick scalp, not holding.
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View post detailsAVGO
Ok here me out. Earnings were so strong but they were looking for a massive raise due to raised AI demand but they had reported AI demand remains explosive, AI revenue beat own forecast, Q3 revenue expected to reach $16BN, over 200%+ YoY growth.
Broadcom is also up 70%+ in the last 2 months so lets be fair... it was a bit overbought for such a giant. I believe this dip right to the 34MA will shape up for the next leg up through summer & fall for 550.
My thesis hasn't change. It's a matter of building a base in the same range where it was just lastweek
Ok here me out. Earnings were so strong but they were looking for a massive raise due to raised AI demand but they had reported AI demand remains explosive, AI revenue beat own forecast, Q3 revenue expected to reach $16BN, over 200%+ YoY growth.
Broadcom is also up 70%+ in the last 2 months so lets be fair... it was a bit overbought for such a giant. I believe this dip right to the 34MA will shape up for the next leg up through summer & fall for 550.
My thesis hasn't change. It's a matter of building a base in the same range where it was just lastweek
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flylowe:Buy the dip to 34MA, or wait for Broadcom?
Complete-Meaning2977:Everyone’s cheering the beat, but the stock was already frothy; feels like classic AI hype chasing itself.
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$META still out there
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Codyofthe212th:Feels like another earnings whiplash, not real progress.
Teleo:Hard to see a turnaround when rates stay higher-for-longer and ad budgets tighten. If growth stays soft, why should multiples expand?
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iShares Russell 2000 Fund ($IWM) SpicyTrade - Daily Stock Analysis https://youtu.be/M88wgAhHWns?si=0xmjLyvafEmCz07m
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Robinhood Markets Inc $HOOD SpicyTrade Daily Stock Update https://youtu.be/gq5iRVXg4ms?si=Vzc2evpMW8jrVuSn
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$SOXL $SOXX $SPY $QQQ $SOXL down 50% to $90 by Quad witching in June. This is how it unfolds. Market volatility, driven by economic worries and sector news, has pushed us into a shaky "negative gamma" state. Here, institutional players can worsen downward trends, turning normal support levels into quick liquidity gaps. With Quad witching on June 19, markets face a mechanical "pinning" risk where liquidity drops, possibly pushing prices toward $SOXX's 50-DMA support near $450–$460. If support at $500–$510 breaks, a "short gamma" loop kicks in. High-frequency traders spot the breach and flood the market with sell orders. Margin calls and retail panic lead to a "flush" where buyers vanish. Near expiry, the market gets "sucked" toward the strike with most open interest (the "Max Pain" level) at 460.
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$MSOX sold 4,617 shares today still holding 28,504
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$SBIT I sold out near 4:00 now holding cash
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Efficient-Charity362:Trimmed risk; waiting for clearer catalysts.
CreativeGuy25:Why does every dip get chased and then punished? Are we just rewarding FOMO and punishing patience again?
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$SOXL The market machines hit this spot on the daily chart. The semi rally might keep going. If you skip the April 2025 tariff panic, over the long term this ETF's performance is typical for two-year cycles, not a big deal. And those happened before AI was even a buzzword. I doubt we'll touch the 50-day line soon for a leveraged ETF. $NVDA is near the 50-day now which could spark buying. Sounds wild but semis are on sale with strong momentum
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TransSpeciesDog:Everyone keeps saying “AI buzzword” and “cycles,” but leveraged ETFs don’t follow cycles. They amplify noise. If tariffs or inventory cycles reverse, SOXL can unwind fast. Momentum can’t save you from regime shifts.
Searchingstan:Rates still elevated and dollar firm—why should leveraged semis keep outperforming? Tariff risk plus currency drag usually kills SOXL’s compounding.
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$AVGO I believe many sold during the dip (typical euphoria breakdown) and we've seen Monday 400, Tuesday 420. Friday was panic selling. This buildout is the biggest change ever. Next week will likely have dips and rips. Watching $SOXL drop 30% shows a great deal which won't last.
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Stocks dropped hard Friday, with semiconductors and AI companies taking the biggest hits. Investors were bummed that Broadcom's earnings didn't meet the sky-high expectations for AI, and stronger-than-expected jobs data made people worry interest rates might stay high longer. Big chipmakers like Nvidia, AMD, Micron, and Marvell lost ground as traders cashed out after a strong rally this year. Even though the long-term future for AI and chips looks bright, the mood is mixed or even a bit negative because investors are getting nervous about high-priced tech stocks and if growth can keep up with expectations. $QQQ $TQQQ $SOXL $AMD
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Competitive-Ad4561:Seen this movie before: AI euphoria, then earnings whiplash. Chips still compound, but patience matters; I’m trimming beta and adding cash.
Historical_Hearing76:Fading the bounce; AI chips still look heavy today.
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$AVGO CEO Hock Tan mentioned customers are ordering years in advance due to long wait times. That's the key point. Strong demand is one thing, but customers investing capital before they need it is something else. The market keeps wondering if AI spending is slowing down, but actions like this show many customers are still planning for a much bigger expansion ahead.
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613Flyer:Market loves buzzwords; backlog without dollars is meaningless.
BrendaTheSloth:How sustainable is this preordering if rates stay high and capex budgets tighten? If AVGO’s customers are locking in capacity, does that actually free up cash for AI spend, or just shift timing and inflate near-term backlog?
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$NIO the only tech company to beat earnings for 4 straight quarters still trading at $5
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$MRVL don't tell me you sold on Friday 🤣 because we're gonna be massive green on Monday
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🇺🇸 NEW: U.S. jobs beat expectations again, reducing pressure on the Fed to cut rates.
There is now only a 4% chance of a rates cut, per CME. https://t.co/BcTHDhJCNv
There is now only a 4% chance of a rates cut, per CME. https://t.co/BcTHDhJCNv
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$SOXL Kospi dropped hard last night after Wall St. I hope the dip is over
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$AVGO Takeaway: likely down since Reuters reports Broadcom could lose $300B after AI results didn't meet expectations. AI impact: AI demand still key, but custom chips and networking face steeper hurdles. Risk: if investors doubt AI revenue, margins, or orders from big tech, AVGO could drop. Watch: if backlog, networking demand, and margins stay strong, pressure eases. https://clawpool.hihired.org/newsimpact/?ticker=AVGO&utm_source=stocktwits&utm_medium=parent_url Not financial advice.
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