Squawk on the Street CNBC Investing Club: Cramer’s Morning Take on Broadcom 3/5/26
Mar 5, 2026
Discussion of a semiconductor company's big earnings beat and booming AI revenue. Breakdown of the company’s long-term AI revenue guide and analyst reaction. Debate over whether the stock is still oversold despite strong business trends. Examination of large buybacks and what management’s actions signal. Brief note on macro risks that could affect the stock.
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Broadcom Projects Massive AI Revenue Growth
- Broadcom's AI business is accelerating with AI revenue at $8.4 billion, more than double year-over-year and up from $6.5 billion last quarter.
- Management guided 2027 AI revenue north of $100 billion and expects to ship ~10 gigawatts to customers like Alphabet, Meta, Anthropic, and OpenAI.
Company Pushes Back On Margin Dilution Fears
- Broadcom signaled strong demand visibility for 2027 and emphasized that AI rack sales won't meaningfully dilute gross margins.
- CEO Haktan pushed back on margin-dilution concerns while analysts raised 2027 estimates (one by 24%).
Consider Broadcom If You Seek Undervalued AI Exposure
- Consider Broadcom as undervalued relative to its revised AI-driven outlook despite recent price decline.
- The company added a $10 billion buyback and repurchased over $7 billion in the quarter, signaling management confidence.