When it comes to the intersection of artificial intelligence and semiconductors, the “other” big name is Broadcom (AVGO). That company delivered encouraging estimates when it reported January quarter results earlier this week.
Indicating that the Direxion Daily AVGO Bull 2X (AVL ) is a geared ETF for risk-tolerant traders to monitor this year, the chipmaker said that for the April quarter, it expects a 30% increase in sequential AI semiconductor demand. For fiscal 2027, Broadcom forecast a minimum of $100 billion in AI semiconductor sales.
To be sure, those are encouraging forecasts. They highlight the potential for AVL to deliver outsized gains in short time frames, provided Broadcom delivers updates that meet or exceed the recently delivered forecast. Remember that AVL is designed to deliver 200% of the daily performance of Broadcom shares. That means that this ETF, while potent, is not a buy-and-hold investment.
Ample Reasons AVL Could Be Rewarding
As is the case with any leveraged ETF, AVL can be an even- and headline-driven product, but the case for using ETFs like AVL is fortified when the underlying stock is fundamentally sound. Broadcom checks that box.
“Broadcom is a dominant force in AI compute chips, second only to Nvidia. It controls the custom AI chip market with the largest customer (Google) and the most customers overall,” noted Morningstar analyst William Kerwin. “Upcoming ramps for Anthropic and OpenAI portend enormous growth in the next two years.”
Potentially boosting the case for trading AVL over short holding periods is the point that the law of large numbers doesn’t appear to be hindering Broadcom — at least not yet. That is, top-line growth continues to amaze.
“Broadcom expects to ship AI chips supporting 10 gigawatts of capacity in fiscal 2027, which is massive,” added Kerwin. “We think the $100 billion figure is conservative, with upside coming from Broadcom’s rack shipments to Anthropic. Still, this implies AI sales doubling in 2027 after nearly tripling in 2026.”
Another reason to consider AVL: A case can be made that Broadcom is undervalued — a rarity in the AI space. Morningstar’s fair value estimate on the chip stock implies significant upside potential.
“We raise our fair value estimate for wide-moat Broadcom to $500, from $480, as 2027 guidance exceeded our expectations and implies rapid ramps for Anthropic and OpenAI. Shares remain about 25% below recent highs in December 2025, and we see immense upside for investors,” concluded Kerwin.
For more news, information, and analysis, visit the Leveraged & Inverse Content Hub.
