Chip stocks are tanking but Apple just dropped $30B on Broadcom — long the safe
Thesis
The semiconductor sector is currently being dragged down by panic over Nvidia's AI server delays and a broad market sell-off triggered by the Iran conflict. However, Apple just committed to spending $30 billion with Broadcom, ensuring Broadcom has incredible revenue stability regardless of what happens to the AI hype cycle. When the broader chip sector drops on AI fears, Broadcom's massive Apple-backed cash flow makes it a prime catch-up candidate once the dust settles.
Strategy approach
Build a rule-based strategy that enters long AVGO on D1 when the overall semiconductor sector (SMH) drops more than 3% in a single session, but AVGO maintains positive momentum (trading above its 10-day simple moving average). Exit conditions: 10% profit target or a 5% stop loss, with a max hold time of 21 trading days.