Morgan Stanley flags Broadcom (NasdaqGS:AVGO) as relatively resilient to U.S. data-center power shortages affecting AI buildouts.
The bank frames a 32-gigawatt U.S. data-center power shortfall as a risk for many AI hardware suppliers.
Broadcom is cited as benefiting from diversified regional demand, detailed tracking of AI product rollouts, and close ties to utilities and data-center operators.
Morgan Stanley’s focus on Broadcom’s insulation from the 32-gigawatt power gap sits within a broader set of AI-infrastructure findings. Take a look at 1 warning sign we have identified for Broadcom.
Readers looking for more ways to position around AI infrastructure themes may want to continue with 92 AI infrastructure stocks.
NasdaqGS:AVGO Earnings & Revenue Growth as at Oct 2026
Broadcom operates as a large U.S. semiconductor and infrastructure software supplier, providing chips and software that sit inside data centers and AI hardware. For this power story, the key angle is its role as a major vendor to global data-center operators rather than only U.S. facilities.
4 things going right for Broadcom that this headline doesn’t cover.
Power constraints test Broadcom’s “infrastructure, not gadget” AI story
The Broadcom Narrative asks you to believe this is a critical digital infrastructure supplier whose AI hardware and VMware-based software keep earning through cycles, even when customers hit practical limits like power. Morgan Stanley’s view on data-center shortages goes straight at that claim.
“Broadcom benefits from that outcome regardless of which AI model wins, which cloud provider gains share, or which software platform becomes dominant…”
See how the full story points towards a $532 fair value for Broadcom.
The bullish read is clear. Morgan Stanley’s focus on power shortages highlights a risk to many AI hardware vendors, yet it argues Broadcom’s multi-region demand, detailed deployment tracking and work with utilities leave its AI XPU and networking pipeline better insulated than peers such as Nvidia or Micron. That lines up with the Narrative’s view that hyperscale contracts and secured supply give Broadcom unusual visibility on AI-related revenue.
The bear case is not removed. Data-center power caps still threaten timing of AI builds, and Broadcom already faces margin pressure from lower gross margin XPUs and complex financing structures around AI chip leasing. If delays bunch up or resale values disappoint, the same tight coupling to AI infrastructure that supports the bull story could amplify earnings volatility.
The takeaway is simple: the same power-shortage news can look like confirmation of Broadcom’s infrastructure role or a stress test of its AI-heavy risk profile, depending on which Narrative you start from.
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Companies discussed in this article include AVGO.
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