Broadcom Inc

Broadcom is positioned as a key beneficiary in the current AI spending surge, contributing significantly to earnings growth. The manager notes that 'four stocks – Nvidia, Micron, Broadcom, and Sandisk – will account for 40 percentage points' of the S&P 500's earnings growth this year. This highlights Broadcom's essential role in the AI arms race, where demand is outpacing supply, and the company is expected to maintain strong returns as it navigates the capital cycle. The strategy's long-held position in memory semiconductors, including Broadcom, reflects confidence in its ability to capitalize on these trends.

Broadcom has been a key holding benefiting from sustained AI-related capital expenditure and continued demand for networking and compute infrastructure. The semiconductor sector, particularly companies like Broadcom, is experiencing robust performance due to the increasing importance of AI in driving demand. The manager notes that 'Holdings such as Broadcom, Nvidia, ASML and Arista Networks benefited from sustained AI-related capital expenditure and continued demand for networking and compute infrastructure.' This positions Broadcom favorably within the broader semiconductor ecosystem as the market evolves.

Broadcom Inc is positioned well within the semiconductor sector, benefiting from the significant spending of hyperscalers. Despite the overall market appearing expensive, Broadcom's free cash flow generation remains strong, and the company is expected to capture more value as hyperscaler investments translate into profitability. The divergence between market cap increases and actual free cash flow growth indicates that Broadcom, along with other tech suppliers, is undervalued relative to its potential earnings from the ongoing AI boom. This presents a compelling opportunity for investors.

We continued to expand our exposure across the Artificial Intelligence (AI) value chain, focusing on areas like energy infrastructure, semiconductor chips, cloud services providers, foundation models, and AI applications & software infrastructure. We also increased our stakes in semiconductor companies such as ASML, Broadcom, Nvidia, and invested in Lam Research Corporation. These investments reflect our view of AI as a structural, long-term driver of value creation, and we believe that companies like Broadcom have the potential to develop tools that create meaningful moats.

During the quarter, we added to our holdings in Broadcom (AVGO) as we believe the investment environment is becoming increasingly differentiated. The focus has shifted towards identifying businesses capable of converting investments into durable earnings growth and competitive advantages. Broadcom's position in the semiconductor industry aligns with this trend, as it continues to generate exceptional returns. We see strong long-term secular tailwinds for Broadcom, particularly in the context of AI and its applications, reinforcing our positive outlook on the company.

Broadcom is positioned favorably within the semiconductor sector, benefiting from the significant investments in computing infrastructure driven by major tech companies. The demand for chips, particularly those designed for AI applications, is surging, and Broadcom's role as an ASIC designer places it in a strong position to capitalize on this trend. The company's market capitalization reflects its growth, ranking seventh globally, and it has seen substantial price appreciation, indicating strong investor confidence in its future earnings potential.

Broadcom Inc has shown a strong performance with a +9.1% change in share price for the first half of 2026 and a +49.3% increase over the previous year. The company develops and markets digital and analogue application specific semiconductors, which positions it well within the growing information technology sector. The fund's investment in Broadcom reflects confidence in its ability to generate significant cash flows and support multi-year dividend growth, contributing positively to overall portfolio performance.

Broadcom was among the portfolio’s strongest contributors as demand for AI-related infrastructure remained robust. The company benefits from continued investment in AI infrastructure, which is a significant driver of growth. The portfolio's underweight allocation to Information Technology was a headwind, but strong stock selection within the sector, particularly in semiconductors, helped offset this. Broadcom's position in the market reflects its competitive advantages and the ongoing demand for its products.

We initiated positions in Broadcom and other high-quality businesses that we believe have been unfairly penalised. Our underwriting has centred on long-term moat durability. The active discrimination between AI winners and perceived losers may be an advantage if market leadership broadens. We added to wider-moat businesses such as Broadcom, which we believe could benefit from the ongoing demand for AI infrastructure and the resilience to see shocks through.

Broadcom was a positive contributor as their technologies remain best in class and demand continues to exceed supply. The company is part of a group of AI-exposed companies with durable franchises, which the manager believes are better positioned compared to lower-quality AI stocks. The outlook suggests a focus on companies with strong balance sheets and earnings durability, indicating a cautious but optimistic view on Broadcom's role in the portfolio.