What changed
$AVGO — AVOID 📊 | 6 MONTHS THESIS
🎯 FQ2 FY2026 (ends May) | reported Jun 03 | Rev $22.2B | EPS $2.44 vs $2.39 🟢 | Margin 48.6%
💡 The market expects sustained hypergrowth and assigns a premium multiple. Our variant view: growth will normalize as AI infrastructure buildout matures, and the P/E multiple will compress toward the 18.7x peer median, erasing all upside and risking >50% downside.
🏢 Business Quality: 8/10
📊 Valuation: rich — Trailing P/E 37.4x vs. sector median 18.7x and historical median 17.4x. FCF yield ~2.4%.
🔮 Catalyst: FQ3 FY2026 earnings (ending Aug 2026, report ~late Aug 2026)
⚖️ Avoid: extreme overvaluation relative to sector and history, no margin of safety, and potential downside >50% on normalization.