$AVGO

A perspective on how stretched current valuations are: $AVGO traded at a median sales multiple of just 5x before 2023. Today, it trades near 25x. Wall Street expects $AVGO to reach $250 billion in sales by 2029. But even if that happens, a re-rating back to 5x sales would still imply roughly 30% downside from today’s level. That is the real risk: AI capex does not need to collapse. It only needs to stop accelerating. Even if hyperscaler capex stays flat at an elevated level, the market can still stop paying peak-cycle multiples for AI infrastructure names. It is not a matter of if, but when.