Over the past several weeks, investors have been bombarded with a wave of updates as companies reported earnings results for the second calendar quarter. For technology investors, artificial intelligence (AI) remains the dominant theme fueling the sector higher.

As I write this (mid-day on Aug. 27), all of the “Magnificent Seven” have posted earnings — with the lone exception being Nvidia (NVDA -3.38%), which reports later today. Still, the breadcrumbs left by big tech point to an undeniable trend: Spending on AI infrastructure is accelerating.

While this is undeniably bullish for graphics processing unit (GPU) leaders like Nvidia and Advanced Micro Devices, it also creates a powerful tailwind for systems integration specialist Broadcom (AVGO -3.70%).

With Broadcom slated to report earnings on Sept. 4, I predict the stock is well-positioned to rally.

Let’s explore why I’m optimistic about Broadcom’s upcoming earnings report, and assess whether the stock is a compelling buy at current levels.

Follow big tech’s breadcrumbs

Global hyperscalers such as Amazon, Alphabet, Microsoft, and Meta Platforms have been spending record sums on capital expenditures (capex) over the last few years. While this clearly bodes well for Nvidia and AMD, Broadcom has also been a quiet beneficiary of rising AI infrastructure investment.

Data by YCharts.

One of Broadcom’s key AI growth drivers comes from its application-specific integrated circuits (ASICs) business. These custom silicon solutions allow customers to design chips that are optimized for their unique workloads.

By integrating purpose-built performance with compute power efficiency, Broadcom’s ASICs help hyperscalers lower their total cost of infrastructure relative to relying solely on off-the-shelf accelerators from the likes of Nvidia. This becomes highly desirable as training and inferencing workloads scale and become increasingly complex as more sophisticated AI use cases unfold.

Broadcom’s networking division is also positioned to benefit materially from the ongoing AI infrastructure cycle. As big tech continues to pour hundreds of billions of dollars annually into GPU deployment, Broadcom’s supporting infrastructure becomes an indispensable unsung hero.

The company’s portfolio of high-performance switches, interconnects, and optical components delivers low-latency, high-bandwidth connectivity to keep next-generation accelerators running at full speed. In essence, the company’s networking gear represents a foundational layer of AI data center construction — ensuring scalability and efficiency as workloads expand.

Image source: Getty Images.

Management likes the stock — shouldn’t you?

With a forward price-to-earnings (P/E) multiple of 45, Broadcom certainly isn’t trading at a discount. In fact, its multiple sits near peak levels seen during the AI revolution.

Data by YCharts.

Even so, the company’s board of directors authorized a $10 billion stock buyback program back in April. Share buybacks at elevated valuations can point to a strong signal: Management remains confident in Broadcom’s long-term growth trajectory, underscored by ongoing hyperscaler investment. On a more subtle note, sometimes companies repurchase their own shares when management thinks the stock is undervalued.

These dynamics could suggest that Broadcom is positioned for sustained, robust earnings growth, which could fuel further valuation expansion — even in the face of a premium multiple.

Is Broadcom stock a buy right now?

For the last few years, the AI trade has largely surrounded Nvidia and the cloud hyperscalers. Yet as infrastructure spending accelerates, the scope of the AI opportunity is broadening to other mission-critical enablers such as Broadcom. Custom chips, high-performance networking equipment, and integrated systems are now just as essential as securing GPUs — and Broadcom sits squarely at this intersection.

In my eyes, Broadcom is approaching its own “Nvidia moment” — a potential inflection where the narrative begins to recognize Broadcom as a supporting pillar of AI infrastructure and not simply an ancillary beneficiary of these tailwinds.

Against this backdrop, I predict that Broadcom’s September earnings report will reinforce its strategic importance in the AI landscape — fueling investor enthusiasm and a further rerating of the stock. For these reasons, I see Broadcom as a compelling opportunity to buy and hold over a long-term time horizon.

On our Comment pages, Sr. Helena Burns issues a robust call for a return to “old school” means of acquiring, developing and retaining knowledge in the age of AI.

Traditionalist though she might be in many ways, however, Sr. Burns’ appeal is not simply to revive the alliterative formula of Readin’, Writin’ and Arithmetic. Rather, she urges a return to the lost arts of using libraries, taking notes, listening to wiser heads, and above all using our own brains rather than relying on the post in the machine to explain the world. 

“We can rebuild a talking, thinking, literate, memorizing culture. But it’s a slow build. It always was, always will be, and it starts when you’re a kiddo. Children in school are now saying they don’t want to learn how to read and write because computers will do it for them. They don’t know that they’re surrendering their humanity,” she writes.

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The good news is that the much-rumoured surrender seems to be much further off than predicted in the recent frenzy over ChatGPT and its cohorts purportedly being thisclose to taking over the world and doing everything from producing perfect sour grapes to writing editorials. 

In facts, recent reports particularly in the financial press, suggest AI-mania is already plateauing, if not hitting a downward curve. That doesn’t mean it won’t still cause significant disruption in workplaces or in how we navigate the storm-tossed seas of daily life. It doesn’t mean we can simply shrug off the statistic Sr. Burns cites of a reported 47 per cent decline in neural engagement among those who relied on artificial intelligence to help complete an essay versus those who got ink under their fingernails. 

But as techno journalist Asa Fitch reported last week, Meta Platforms has delayed rollout of its next AI iteration, Llama 4 Behemoth, because of engineering failures to significantly improve the previous model. Open AI, meanwhile, overhyped its follow up ChatGPT 5 and saw it effectively flatline in the market.

Business leaders, already sceptical of security and privacy concerns with AI, have hardly been reassured by the “tendency of even the best AI models to occasionally hallucinate wrong answers,” Fitch writes.

More critically, many businesses looking at the allure of AI don’t yet know, in very practical terms, what it can do for their particular sector. We tend to forget that from the “future is now” advent of the Internet, it took the better part of a decade before society began to appreciate its ubiquitous uses.

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University of California, San Diego psychology professor Cory Miller points out there even more formidable barriers to broad AI adaptation. Not the least of such obstacles are the requirements for, as Miller says, “enormous hardware, constant access to vast training data, and unsustainable amounts of electrical power (emphasis added).”

How unsustainable? A human brain, Miller writes, “runs on 20 watts of power – less than a lightbulb.”

AI by contrast?

“To match the computational power of a single human brain, a leading AI system would require the same amount of energy that powers the entire city of Dallas. Let that sink in for a second. One lightbulb versus a city of 1.3 million people,” he says. 

The comparison is arithmetically sobering. It’s also ultimately a hallelujah chorus to the glory of creation that is humankind. We exist in a culture awash – it often seems perversely pridefully – in self-underestimation and outright denigration. Oh, to deploy Hamlet’s immortal phrase, what a piece of work is man.

Without question, evil lurks in our darker corners and threatens to beset our best and brightest achievements. But achieve we do as we collectively engage the unique phenomenal 20-watt light bulb brains that are the universal gift from God, our Sovereign Lord and Creator.

In another column in our Comment section, Mary Marrocco illuminates the dynamic of that gift and that engagement, quoting St. Athanasius’ observation that “when we forgot to look up to God, God came down to the low place we’d fixed our gaze on.”

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The outcome was the glorious rise of our Holy Mother the Church, whose cycle of liturgical years, year after year, reminds us of who we are, what we are, and to whom we truly belong.

There is not a shred of artificiality in the intelligence of the resulting library (biblio) of the Bible’s books, its Gospels, its Good News. There is only God’s Word, the most extraordinary conversation any child, any human being, could ever be invited to learn from 

Forget fantasy football, this is fantasy machine learning.

People are placing their bets on markets like Kalshi, where they can trade on the outcome of real-world events, everything from when Taylor Swift and Travis Kelce will wed to whether Google will break up and, of course, the AI model race. Kalshi saw 10 times the volume on AI trades compared with the start of the year, according to The Wall Street Journal.

“Kalshi’s markets are extremely efficient and serve as a source of truth on the likelihood of all events, including AI model progress,” Jack Such, a spokesperson for the company, told PYMNTS.

So who’s winning based on the bets?

“Gemini is the current market leader for ‘Best AI’ by the end of 2025,” Such said.

On Kalshi, Gemini shows a 58% probability of winning, compared with 19% for ChatGPT, as of midmorning on Thursday (Aug. 28). The third spot goes to Grok, at 17%. Claude, which Menlo Ventures said was the enterprise favorite, clocks in at 2% and tied with Meta’s Llama.

The total trading volume reached $8.1 million.

Kalshi is just one of several platforms that are pivoting to AI trading.

Other players include Polymarket, an offshore crypto-based prediction market, Manifold Markets, Metaculus and other sites.

Which AI model is winning globally? The AI community abroad agrees with the Americans. Polymarket, which is only available to non-Americans, predicts that Google will win by year’s end, at 66% odds. OpenAI comes in at 16% probability while xAI is third with 14%.

See also: Crypto Firms Grapple with Bank-Like Risks, Without the Regulation

Betting on Anything in the World

How Kalshi works: People bet yes or no on outcomes in the real world, such as whether the Fed will cut short-term interest rates by 25 basis points in September (76% probability it will) or who will win the Nobel Peace Prize (Yulia Navalnaya, widow of Russian opposition leader Alexei, is at 20% probability and Donald Trump at 10%).

Bettors buy contracts tied to these outcomes at prices between a penny and 99 cents, settling at $1. For example, if a bettor buys a contract for 40 cents and they guess the outcome correctly, they are paid $1. If they guessed wrong, they lose their 40 cents. Bettors can also sell the contract before there’s an outcome if they see the contract price go up or down.

In a tie, the default would be a negative outcome.

For AI models, results will be determined by the rankings on the LMSYS Chatbot Arena Leaderboard at the end of the year, according to Kalshi.

Currently, the leaderboard shows Gemini 2.5 pro slightly ahead of GPT-5 for first place, followed closely by Claude Opus.

One Kalshi user noticed a tie earlier this month and wrote, “it’s a tight race on LMArena. I don’t understand why the spread is so drastic. Huge earnings for people who bet on GPT with decent odds that it will flip.”

Kalshi began allowing bettors to trade on AI models in 2023. “We were confident in consumer demand for these products because of the rapid growth of AI and the economic and political consequences of model progress,” Such said.

Kalshi said the U.S. Commodity Futures Trading Commission regulates it as a financial exchange for trading futures, swaps and options on commodities.

“Understanding that Kalshi is regulated … helps reassure users that they are engaging with a platform that adheres to the highest standards of operation and accountability,” the company says on its site.

Here’s to hoping the bet will be good.

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