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Sensationalism Is The New Journalism …

Have you noticed that the financial news spins a narrative on a partial headline or runs with one part of the story on a continuous basis? Isn’t this the same as half-truths? If you tell only one half of the perspective, all for the sake of keeping your sponsors happy, doesn’t that make your point invalid? 

It makes one question the validity and then the type of influence we allow them to have. Media outlets often report less on corporate misconduct, such as environmental or ethical violations, if the offending company is a significant advertiser. 

Research found that the likelihood of reporting falls substantially, sometimes to as low as 9.5%, when an advertising relationship exists. Outlets sometimes slant reporting to match the political or economic opinions of their target readership, which aligns with advertisers’ interests for reaching a specific audience. 

This increases the outlet’s ability to charge higher prices for targeted ads while providing only a single perspective that resonates with their audience.

To my point, some news businesses prioritize dramatic or extreme viewpoints on financial news—such as stock market crashes or booms—because sensational content drives clicks and engagement, boosting ad impressions and revenue, even if the coverage lacks nuance or context.

Sensationalism has indeed become the new form of news because of its shock value and its ability to keep the audience tuned.

Sensationalism typically involves exaggeration, provocative language, and emphasis on scandalous or shocking elements. It appeals to emotions like fear, outrage, or curiosity to engage audiences quickly. 

News stories are crafted not just to inform but to entertain or provoke strong emotional responses, often sidelining factual depth or balanced reporting.

And due to the competition happening before your eyes for your eyeballs in an extremely crowded space, new organizations are fighting to keep an already shrinking attention span. 

It’s gotten to the point where the headlines feel like click cringe-worthy clickbait and it’s fueled by commercialization because media outlets rely heavily on advertising revenue, which incentivizes producing content that generates high engagement. 

Nothing sells like outrage and controversy with the purpose of generating interactions such as comments and shares, increasing exposure, and advertising value.

This dynamic encourages sensational news that appeals to extremes and emotional triggers rather than balanced, objective reporting. 

Financial news outlets have a habit of manipulating macroeconomic data in various ways to push narratives that align with political or ideological agendas, often by selectively highlighting or downplaying certain data points to shape public perception.

It’s not what’s real anymore it’s what you believe and these outlets want to control not just the narrative but the way you think. 

Financial news outlets often emphasize one side of the macroeconomic story by focusing on favorable data points like low unemployment numbers or GDP growth, while minimizing less favorable indicators such as wage stagnation or underemployment. 

This selective emphasis creates a skewed narrative portraying the economy as either stronger or weaker than it truly is, depending on the desired message, like the reporting on how the consumer is strong based on a data point, when the consumer in reality is actually having an extremely tough time dealing with their own personal financial crisis. 

But if Wall Street can paint the narrative that the consumer is healthy, it clears the path for whatever they want to happen next. 

Just pay attention to how the algorithms respond to the news and how they are programmed to respond to the narrative shifts in the news. 

If you understand this, then you’ll understand the incentive for a hedge fund manager or institutional trader to use these outlets to push fabricated narratives that exaggerate the profit on both sides of the trade. 

It’s one big sophisticated circus, that’s levels above the retail trader, and the seats at this table are highly coveted, expensive, and profitable. But the question remains, how do you trust the words of a financial commentator, financial analyst or anyone showcased in the media?

The short answer is…you don’t…you inspect what is being said, remember this and never forget it…whenever someone is talking, there is something that’s being sold or being bought, and the person or people doing the talking is usually the person manipulating the buyer. 

This is why it’s important to listen with the correct filter, keeping what is value and discarding what is trash because it’s not what they say it’s what they are not saying. 

 WHEN INVESTING BECOMES A LIFESTYLE YOU WEAR IT!

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Broadcom… The Chip Markets Sloppy Second…

I have always found it amusing how forward projections move certain stocks and have virtually no impact on others. 

Last week, Broadcom came out with what analysts and the street perceived to be an explosive quarter of earnings—

• AI semiconductor revenue surged 63% year-over-year to $5.2 billion, reflecting strong demand for AI-related products.

• Gross margin stood at 78.4%, higher than initially guided, supported by strong software and semiconductor product mixes.

• Adjusted EBITDA increased 30% year-over-year to $10.7 billion, or 67% of revenue, indicating strong operating leverage.

• Earnings per share (non-GAAP) came in at $1.69, slightly above the forecasted $1.66.

• The company reported a record backlog of $110 billion, driven by robust AI demand.

• Q4 2025 revenue guidance is set at $17.4 billion, a 24% increase year-over-year.

• Free cash flow was a record $7 billion, with $2.8 billion returned to shareholders in dividends

And while this sounds awesome, I feel it’s a case of mistaken identity when it comes to who will be the leader in the chip market and who the street wants to pick as their personal champion. 

First and foremost, for the most part, NVDA as compared to Broadcom competes in two distinct categories, and while Broadcom’s market share may be competitive in custom chips, it only amounts to 11% market share

For every dollar spent on the data center, Broadcom gets approximately 15 cents to 20 cents, and this is only because of their networking footprint, but when you look at the big picture, without networking, they only obtain 7 cents to 8 cents for their semiconductor solutions.

As compared to what is now estimated, 25 cents to 35 cents is going to NVDA.

When you look at the quarter, AI Semiconductor Revenue was $5.2 billion (56% of Semiconductor Solutions revenue), driven primarily by custom AI accelerators (XPUs) for inference workloads tailored to hyperscalers, which tells me that hyperscalers are trying to create their own solutions to keep up with demand, but when you dig deeper it’s all about computational power and nothing compares to NVDA.

Broadcom's Non-AI Semiconductors revenue was around $4 billion, which includes networking chips (Jericho routers, Tomahawk switches), broadband, server storage, wireless, and enterprise networking products. 

Non-AI segments were relatively flat or down sequentially, with broadband showing some growth. And VMware accounted for 43% or 6.8 billion of their record revenue, so without VMware.

Looking back before the AI boom in 2022 and 2023, year-over-year growth was 7.88% before surging 44% from 2023 to 2024, driven by increased demand in semiconductor solutions, but mainly the acquisition of VMware 

Broadcom has always been a growth-by-acquisition company, as they have had 39 since their inception. This highlights Broadcom’s inability to grow organically after 39 failed attempts.

 And while they are riding the AI wave, I believe, as you do one thing, you do all things. Organic growth has always been a problem for Broadcom, which points to leadership 

If we can’t do we buy it, but it has not proven to be a great strategy as they have also proven not great at creating synergy between each acquisition. 

Just look at the revenue growth before VMware:

• 2021 27.45B

• 2022 33.20B

• 2023 35.81B

• After the VMware acquisition: 2024 51.57 

The market frowns upon companies that try to buy their way into growth; just look at their failed acquisition of Symantec’s Enterprise Security Division (2019): Acquired for $10.7 billion, this cybersecurity business underperformed expectations and did not generate the anticipated synergies. 

They eventually had to shift focus as they struggled with integration and competitive pressures in a fast-evolving market.

And while there are plenty of failed acquisitions, I only point out the behavior of buy-to-build instead of organically building. 

Now that they are in the throes of the AI revolution, we are supposed to believe they will not make the missteps that caused them to buy companies to bolster their anemic growth and failed leadership. 

So now all of a sudden, because of a 10 billion contract suspected to be from Open AI, it’s supposed to upend NVDA, which is laughable at best and a deep seek moment—NOT! 

First of all, deliveries aren’t expected to start until the second half of 2026 or into 2027. By the time their clients receive their custom chips, NVDA will be four chip generations deep, crushing all challengers. 

The expected computational gains from NVIDIA’s upcoming AI chips compared to the current Blackwell generation are substantial:

Rubin Chip (2026) is projected to deliver over 3x the compute power of Blackwell, with up to 1.2 exaFLOPS of FP8 performance and 3.6 exaFLOPS of FP4 inference throughput. It features higher memory bandwidth (about 13 TB/s) and advanced interconnects for faster data transfer.

Blackwell Ultra (2025) delivers about 1.5x more AI compute power than standard Blackwell GPUs, with enhanced tensor cores and up to 288GB HBM3e memory, enabling faster reasoning and larger model contexts. A Blackwell Ultra rack can process up to 115 exaFLOPS of FP8 compute.

Rubin Ultra (expected 2027) will further push compute power, offering 100 PFLOPS of dense FP4 compute, effectively quadrupling memory capacity to 1TB per GPU and delivering around 15 exaFLOPS per rack, which is approximately 5x the performance of Blackwell Ultra.

Jensen stated that the ASIC still has to be better than the best, underscoring that custom chips must outperform NVIDIA’s established GPUs to gain traction.

Jensen also predicted that “most custom chip projects are going to get canceled,” stressing the difficulty of matching NVIDIA’s leadership.

While this is the only prediction, I will put my money on the leadership and the piping that has approximately 4 million to 6 million softer programmers with a 19-year lead (Cuda).

Broadcom is positioning itself as the tailored, more efficient solution, but NVDA is leading from a long distance, and while eventually they will be caught, not today! 

Analysts expect Broadcom’s AI revenue to approach or exceed $15-20 billion in fiscal 2026; this is inclusive of networking, which is approximately 40% of semiconductor revenue today.

Which means if you back out 0% and look at the expected 100% to 110% growth in AI, semiconductor solutions—which if you extrapolate the networking out, that’s only 9 billion to 12 billion dollars of growth in AI in 2026. 

Meanwhile, NVDA is expanding and landing, which, by the way, Morgan Stanley predicts data center growth could reach 217 billion.

Bottom line is…you can let Wall Street confuse you with temporary thinking if you want, but if you actually analyze the long-term details, Broadcom doesn’t even rank as sloppy seconds. 

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Kevin Davis Founder of Investment Dojo and Author of The C.R.E.A.M. Report