Apple drops $30B on Broadcom as AI chips bottom — buy the semiconductor dip
Thesis
Apple's staggering $30 billion commitment to Broadcom proves that the underlying fundamentals and demand for advanced chips remain incredibly strong, regardless of the broader market panic. While headlines about Nvidia's server delays have scared investors and driven the whole sector down, Bloomberg notes Nvidia is now the cheapest it has been since before the AI boom. Connecting Apple's massive spending vote of confidence with the extreme discount on Nvidia suggests the recent tech selloff is overdone. We want to buy top-tier chipmakers that have tangible, locked-in revenue pipelines.
Strategy approach
Build a mean-reversion strategy that enters long AVGO on D1 when it closes within 1% of its 10-day high while NVDA is trading more than 2 standard deviations below its 20-day mean. Include a 5% stop loss and a 15-day maximum holding period.