Growth Potential vs Valuation Reality – Broadcom, Deutsche Telekom, Volatus Aerospace

Broadcom: AI Revenue Explodes – So Why Is the Stock Still Falling?

Broadcom shares (WKN: A2JG9Z | ISIN: US11135F1012 | Ticker: AVGO) have recently come under pressure despite new record figures. The share most recently closed at USD 357.90, as profit-taking weighed on the price. Nevertheless, it is up 1.45% since the start of the year, while the share has gained 18.11% over the past 12 months. The market capitalization of the semiconductor and software group now stands at around USD 1.70 trillion.

The figures were published on September 2 after the US stock market closed and relate to the third financial quarter, which ended on August 2, 2026. During this reporting period, turnover rose by 86% year-on-year to USD 29.59 billion. Net profit under US accounting standards jumped by 216% to USD 13.09 billion. On an adjusted basis, Broadcom earned USD 3.32 per share, an increase of 96%. The group once again exceeded expectations.

The semiconductor business remained the main driver. Segment revenue increased by 127% to USD 20.84 billion. The AI chip business performed particularly strongly: Broadcom generated USD 16.7 billion, 221% higher than a year earlier and 54% higher than the previous quarter. Broadcom develops custom AI accelerators and network solutions for major cloud and technology companies. The infrastructure software business, which includes VMware, grew by 29% to USD 8.75 billion.

Cash flow performance was also strong. Operating cash flow reached USD 14.2 billion. Following investments of approximately USD 500 million, free cash flow totalled USD 13.7 billion. This represented a substantial 46% of quarterly revenue. In addition, Broadcom intends to pay a quarterly dividend of USD 0.65 per share. For the fourth fiscal quarter, Broadcom expects revenue of around USD 34.8 billion, up 93% from the previous year. Revenue from AI semiconductors is even set to rise by 236% to USD 21.7 billion. The adjusted operating margin is expected to be around 66%.

Even more impressive is the long-term outlook. CEO Hock Tan anticipates AI revenue of around USD 115 billion for the financial year 2027. In the following year, this could rise to as much as USD 230 billion. This positions Broadcom, alongside Nvidia, as one of the biggest beneficiaries of the global surge in investment in AI data centres.

Why did the share price fall despite this? While the forecast for the current quarter was broadly in line with official analyst estimates, it fell short of particularly high market expectations. Investors are also concerned about the company's reliance on a small number of major clients, growing competition from Marvell and financial commitments relating to new data centres. With a market capitalization of USD 1.70 trillion, enormous growth is already priced in.

From a technical analysis perspective, the picture remains weak. Trading at USD 357.90, the share price is below the 50-day moving average (MA50) of USD 384.08 and the long-term key MA200 of USD 369.76. The moving averages are therefore sending a negative signal. The share price would first need to reclaim the MA200. There is an important support zone around USD 336. Broadcom continues to deliver exceptional growth. However, the fall in the share price highlights just how high expectations are for AI shares. Even record figures are not always enough if the short-term outlook only roughly matches forecasts.

Volatus Aerospace: Building a Vertically Integrated Drone Systems Business

Global defence spending is driving the drone market to new heights. Experts expect the market to reach a value of over USD 160 billion by 2034, driven by the protection of critical infrastructure by governments as well as by civilian applications such as search and rescue missions. Against this backdrop, Volatus Aerospace (WKN: A2JEQU | ISIN: CA92865M1023 | Ticker: ABB) is pursuing a dual-use strategy: civilian drone and software solutions that also meet government security requirements. This focus, supported by strategic partnerships, strengthens the company's competitive position in public procurement – particularly in its home market of Canada.

Recent operational progress underpins the growth plans. The partnership with Singular Aircraft is driving the further development of the FlyOx 1 drone in Canada and opens up the heavy-lift drone segment for Volatus. With a newly opened production facility in the Canadian city of Mirabel, a local supply chain is being established to enable deployment of the system in firefighting missions. The FlyOx 1 has a take-off weight of around 4,000 kg and a payload capacity of 1,560 litres, setting high standards for autonomous flight systems.

At the same time, Volatus is strengthening its collaboration with Kraus Hamdani Aerospace to create a network-based ecosystem designed specifically to make forest firefighting in Canada more efficient. At the heart of this is the K1000ULE drone with ATNE++ communication architecture. This is designed to ensure continuous reconnaissance and stable ground station connections, even in remote regions. It is this concept in particular that sets Volatus apart from conventional drones and expands its performance profile beyond individual, yet interchangeable, missions. The combination of its proprietary SKYDRA software platform, services and hardware is already driving revenue margins and the scalability of the business model.

The latest financial figures for Q2 2026 are already impressive: revenue of CAD 8.42 million, up 49.5% from the previous quarter; equipment deliveries rose by 38%, and services by an even higher 59%. Cash and cash equivalents of CAD 59.2 million at the end of the quarter also demonstrate a robust capital base, enabling the company to pre-finance the ramp-up of production and fund further investments.

The geopolitical landscape is supporting Volatus's strategic shift towards becoming a comprehensive provider of integrated drone solutions. In addition to Canada, further opportunities are opening up internationally, such as through qualification for Phase II of the US Drone Dominance Program, which could potentially lead to larger contracts from US defence programs. At the same time, initiatives such as the UK- and Latvian-led drone coalition, with a budget of EUR 45 million, and the German Bundeswehr's EUR 540 million procurement program demonstrate the growing interest in procurement within the drone sector. If Volatus can consistently expand its technical standards, system integration and service offerings, this will result in a rising revenue growth trajectory in the medium to long term, particularly in North America and Europe.

From a technical analysis perspective, the picture has recently stabilized again. The share price of CAD 0.50 is now just below the 50-day moving average at CAD 0.52, but the 200-day moving average at CAD 0.62 remains just under 20% above the current price level. The next support zone lies between CAD 0.42 and CAD 0.46.

Deutsche Telekom: Elliott Steps In – Could the Mega-Merger with T-Mobile US Fall Apart?

Shares in Deutsche Telekom (WKN: 555750 | ISIN: DE0005557508 | Ticker: DTE) returned to the spotlight among investors at the end of last week. This was triggered by reports of the involvement of the US activist investor Elliott Investment Management. Although the share price is still up by 0.5% since the start of the year, shareholders have actually seen a loss of 7.8% over the year as a whole. However, Elliott's involvement is not regarded as a routine purchase by an asset manager, but rather as that of one of the world's most influential activist investors. The firm was founded in 1977 by Paul Singer with start-up capital of USD 1.3 million. Elliott now manages around USD 80.3 billion. Singer's personal fortune is estimated by Forbes at approximately USD 6.7 billion. The fund invests in undervalued companies and frequently demands share buybacks, cost cuts, divestments or changes in strategy.

According to information from Reuters, Elliott has now built up a stake in Deutsche Telekom. The size of the shareholding remains unknown. In any case, a stake exceeding 3% would have to be disclosed in Germany. Elliott is likely to oppose, above all, a full merger with T-Mobile US. Deutsche Telekom already holds around 54% of the shares in its US subsidiary. A merger could result in one of the most significant stock market mergers in history. Arguments in favour include a simpler group structure, greater control over the main profit driver, and consolidated strategic decision-making.

However, many investors see considerable risks. The merger would be extremely complex from a legal and regulatory perspective. JPMorgan also described the potential transaction as highly complex and pointed to unclear strategic advantages. Elliott apparently favours a simpler approach: additional share buybacks. As recently as August, Telekom increased its 2026 buyback program by a further EUR 3 billion. Together with the current program, this means that treasury shares totalling EUR 5 billion can be acquired by the end of the year. Most of these shares are then to be cancelled.

This is of interest to shareholders because profits are spread across fewer shares, which can lead to an increase in earnings per share. At the same time, Telekom stated that its share price had recently been at the lower end of its historical price-to-earnings (P/E) ratio range. However, share buybacks do not solve all operational problems, including competition from satellite providers and the debate over T-Mobile US's fibre-optic position.

From a technical analysis perspective, the picture has improved. The share price of EUR 28.10 is just below the 50-day moving average at EUR 28.37 and the key 200-day moving average at EUR 28.58. This creates a slightly negative signal. For a positive trend reversal signal, the share price would now need to rise sustainably above EUR 29, or better still, EUR 30.

Broadcom reports record figures and strong AI revenue, but the share price is falling despite a jump in profits, as the outlook only just meets the very high expectations. Volatus Aerospace is developing into a vertically integrated drone systems provider and is strengthening its position in Canada through partnerships with Singular Aircraft and Kraus Hamdani Aerospace. Deutsche Telekom is the focus of an activist investor, while share buybacks are supporting earnings per share potential, even though the merger scenario remains uncertain due to complex regulatory issues.