Apple and Broadcom shares keep hitting records. Why each have more room to run

Counterpoint Research projects Apple will ship 243 million iPhones in 2025 versus Samsung's 235 million, giving Apple a projected 19.4% global smartphone share (Samsung 18.7%) as iPhone 17 shipments rise ~10% YoY, supporting continued upside in AAPL amid questions about its AI roadmap. Goldman Sachs raised Broadcom's price target to $435 (from $380) and expects fiscal‑2026 AI revenue to grow ~128% YoY, citing sustained hyperscaler AI spending and Broadcom's co‑design role on Google's TPUs; Broadcom reports fiscal Q4 on Dec. 11 and remains a key beneficiary of rising AI capex.

Analysis

Market structure: Apple (AAPL) and Broadcom (AVGO) are direct beneficiaries — AAPL from a stronger iPhone 17 sell-through signal (shipments +10% YoY; consensus 243M units in 2025) and AVGO from hyperscaler AI capex (Goldman forecasts AVGO AI rev +128% YoY in FY26). Losers include Samsung (share slipping to ~18.7% vs Apple 19.4%) and smaller SoC/network vendors who lack bespoke TPU relationships. Strong device shipments and hyperscaler orders tighten component lead times and give OEMs and custom-chip providers incremental pricing power this cycle.

Risk assessment: Key tail risks are a hyperscaler AI-spend pause (macro shock), inventory correction where shipments outpace sell-through (AAPL), and regulatory/antitrust action targeting Apple ecosystem lock-in or Broadcom’s customer concentration. Near-term catalysts: AVGO earnings on Dec 11 and any 90-day disclosure of Apple AI roadmap (conversational Siri) — misses would move prices 10–25% intra-quarter. Hidden dependency: AVGO’s upside is concentrated in a handful of customers (Google, potentially Meta), so revenue guidance is binary.

Trade implications: Tactical: favor AVGO long exposure into Dec 11 with a protective structure rather than naked calls — implied vols likely rich pre-earnings. For AAPL, prefer buy-on-pullback or income strategies (covered calls) until Apple provides tangible AI monetization; shipping momentum supports selective longs but monitor sell-through. Rotate sector overweight to semiconductor infrastructure and cloud capex suppliers; underweight legacy handset OEMs and single-product consumer names without AI/service monetization paths.

Contrarian angles: Consensus assumes steady sell-through and uninterrupted hyperscaler spending; both can flip quickly — if Apple sell-through lags shipments by >5–7ppt over two quarters, expect a 10–15% AAPL downside. AVGO’s valuation appears to price FY26 >100% AI growth; if AVGO reports AI rev growth <80% or warns on customer concentration, downside could be 15–30%. Historic cycle: large capex waves in 2017–18 then normalization in two years suggests plan for mean reversion in 2026–27.

Key Decisions for Investors

• Establish a 2–3% long position in AVGO ahead of fiscal Q4 results (Dec 11), financed by selling a smaller notional (0.5–1%) of short-dated OTM calls or buying a protective put; alternatively buy a Jan‑2026 call spread 10–25% OTM to capture FY26 AI upside while limiting premium.
• Initiate a 2–3% core long in AAPL but fund via selling 1–2% 6–8 week covered calls if you own stock, or buy AAPL 3‑month 7–10% OTM put spreads (cost-limited) to hedge a 10–15% downside if sell-through disappoints or AI roadmap is delayed.
• Pair trade: Long AVGO (2%) / Short INTC (1.5%) to express hyperscaler/custom-chip upside vs legacy CPU exposure; rebalance if AVGO AI revenue guidance <80% YoY or INTC announces material design wins with hyperscalers.
• If AVGO reports FY26 AI revenue guidance ≥100% YoY, add up to +1–2% size within 5 trading days; if guidance <80% or customer-risk disclosure increases, reduce AVGO exposure by 30–50% immediately.
• Underweight/avoid Samsung/other legacy handset OEM exposure and allocate that capital into semiconductor equipment and cloud infrastructure names (SMH-adj) over the next 3–12 months, targeting a re-allocation of 3–5% of equity exposure into this thematic sleeve.