Magic Markets #166: Are Chips the New Oil? - Saudi Aramco and Broadcom

Are chips the new oil? And no, we aren’t talking about oily chips, so take your junk food cravings elsewhere, like to last week’s show on Domino’s Pizza!

In this show, Saudi Aramco and Broadcom were the focus areas. It would’ve been too obvious to choose Nvidia.

The Finance Ghost dealt with Saudi Aramco, which has the uninspiring stock ticker 2222. That’s where the boring stuff ends, as the company boasts a highly impressive array of vertically integrated operations that go beyond just oil. There’s no denying the fact that oil is the cash cow though, and there’s a lot of cash coming out of the desert.

Mohammed Nalla brought Broadcom to the show, starting with what the company actually does and the core strength in the data centre industry. Broadcom is more than just a semiconductor (or chips) business. It may not pump oil out of the ground, but the business does operate at strong margins. With a diversified model though, the company has only partially benefitted from the huge growth in semiconductors. The dividend yield remains very low, so the market is pricing in a lot of growth.

Join us in this show for an excellent overview of the recent performance and trends at these companies.

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