Excerpts:

Broadcom's close relationship with hyperscalers puts it in an excellent position to grow

The tech stock has performed exceptionally well over the past couple of years, particularly as tech capex has risen.

Broadcom's stock may not be as expensive as it seems

Even though Broadcom's stock has amassed some significant gains in recent years, its valuation is not outlandish. It's trading at 65 times its trailing earnings, but that falls to a multiple of 21 when based on the future profits that analysts expect from the company in the year ahead.

Freightos Weekly Update - August 18, 2026

Excerpts:

Ocean rates - Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) increased 9%.

Asia-US East Coast prices (FBX03 Weekly) increased 3%.

Asia-N. Europe prices (FBX11 Weekly) decreased 1%.

Asia-Mediterranean prices (FBX13 Weekly) decreased 4%.

Analysis:

The US-Iran Memorandum of Understanding – signed sixty days ago and aimed at reopening the Strait of Hormuz and kickstarting negotiations to end the war – expired yesterday. As Iranian attacks continue and the US blockade remains in place, a reopening is seemingly no closer than before the agreement.

Despite the ongoing war and increased tensions and renewed attacks in the Red Sea, Maersk – along with Hapag-Lloyd, CMA CGM and COSCO – is determined to continue taking steps back toward resuming Red Sea transits. While earlier threats and attacks in the waterway had led to carrier u-turns, changed container market conditions may be behind this new carrier resolve to return even as security concerns remain.

Linerlytica recently pointed out that even with significant insurance premiums to cross the Bab el Mandeb, higher fuel costs from the Hormuz closure are making diversions around the Cape of Good Hope much more expensive than they’d been from late 2023 when diversions began until the start of the war.

Another new motivating factor may be port congestion that just won’t seem to go away. The current spike in congestion can be attributed to external shocks like recent storms and drought. But even before these developments, major ports in the Far East and especially Europe have been plagued with higher than normal delays due to steady increases in volumes that are pushing past port capacity levels.

Maersk recently singled out congestion as a new and major component of container market dynamics, with growing headhaul demand leading to a heavier headhaul/backhaul imbalance, and a growing number of empty containers for ports to process. In terms of the Red Sea, vessel capacity chronically tied up for long stretches at congested ports may be incentivizing carriers to consider the shorter Red Sea route and add some speed to a slowed-down ecosystem.

Port congestion, which now includes delays from a labor strike in Germany, could be one factor keeping Asia - Europe container rates higher than they otherwise would be as peak season demand eases. Cooling volumes have brought down freight rates from their mid-July highs on Asia - Europe lanes, as this year’s early peak season started to unwind early too.

Asia - N. Europe prices averaged about $5,000/FEU last week but have decreased to $4,700/FEU so far this week, down 20% and more than $1,000/FEU since the July high, but still 60% and $1,800/FEU higher than back in May before peak season began. Asia - Mediterranean rates dipped 4% last week but fell another $900/FEU so far this week to about $5,000/FEU for a $2,000/FEU and 30% slide from their July peak.

Peak season demand on the transpacific, meanwhile continues to hold up. Rates to the West Coast climbed 9% last week to about $7,400/FEU, nearly back to its earlier high following some decrease in the second half of July. East Coast prices increased 3% last week to a new high of $9,400/FEU.

Container spot rates could face some upward pressure from other sources in the coming weeks too. Bunker prices have climbed 15% since the ceasefire collapse, and some carriers will increase emergency fuel surcharges by about $90/FEU in mid-September.

The Panama Canal Authority is taking preemptive steps to conserve water in anticipation of serious El Nino-caused drought later this year and into 2027. The ACP has reduced daily transits by two, and will lower the maximum draft for Neopanamax vessels by a foot and a half to 48 feet later this month, and 47.5 feet in early September. Some carriers announced canal transit surcharges ranging from $200 - $1,000/FEU starting in mid-September, which could impact freight rates for some Asia - US East Coast volumes.

For frame of reference, the Panama Canal last faced significant low water levels for about a year starting in May 2023. At its lowest, draft restrictions were set at 44 feet and daily transits were reduced to 22 from a norm of about 36. Higher costs and longer waits meant that some carriers adjusted relevant services to avoid the canal, relying instead on transhipment from one coast of Panama to the other. Some of the West Coast volume increases during that stretch may have also been driven by those restrictions.

In the article, “Broadcom Is Set To Rewrite The AI Narrative”, published by Nova Capital (a contrarian, growth-at-a-reasonable-price focused analyst group), the author presents a bullish thesis on Broadcom Inc. (NASDAQ: AVGO).

The core argument centers around the idea that the market continues to view Broadcom primarily through a traditional semiconductor lens, underestimating its pivotal positioning in the artificial intelligence infrastructure landscape.

Key Takeaways & Core Thesis

1. Custom Silicon (XPUs/ASICs) Acceleration

 Market Misconception: While GPUs (like Nvidia’s) dominate mainstream headlines, hyperscalers (such as Google, Meta, and Consumer Internet giants) are heavily investing in custom Application-Specific Integrated Circuits (ASICs) or XPUs to optimize workloads and drastically reduce Total Cost of Ownership (TCO).

 Broadcom’s Dominance: Broadcom is the premier partner for hyper-scalers developing custom AI chips. The analyst highlights that custom silicon design wins represent a sticky, high-margin revenue growth driver that the market has not fully priced into Broadcom’s long-term valuation model.

2. The Ethernet / AI Networking Moat

 Underappreciated Infrastructure: Compute power alone is useless without massive networking scale. AI clusters require ultra-high bandwidth, low-latency connectivity to link tens of thousands of chips together.

 Open Ecosystem vs. Proprietary: Broadcom’s networking platform (including its Tomahawk and Jericho switching chips) leads the transition toward open Ethernet-based AI networking. This positions Broadcom as a crucial beneficiary as hyperscalers push for open standards rather than proprietary ecosystems (such as Nvidia’s InfiniBand).

3. VMware Integration & Enterprise AI Software

 The author points to the post-acquisition integration of VMware as a compounding cash generator.

 By transitioning VMware to subscription models and leveraging software offerings for enterprise private cloud and AI deployments, Broadcom generates predictable cash flows that help fund further R&D and capital return strategies.

4. Valuation & "GARP" Appeal

 Growth at a Reasonable Price: Nova Capital argues that when factoring in the long-term runway of custom AI chips combined with high-margin networking and software cash flows, AVGO offers a far more resilient risk/reward profile than pure-play compute hardware makers.

 The stock presents a compelling upside opportunity for investors seeking exposure to AI hardware infrastructure without paying extreme speculative multiples.

Conclusion / Rating Recommendation

Nova Capital concludes with a Bullish / Buy stance on Broadcom, asserting that as AI clusters scale and the industry shifts toward custom silicon and open networking frameworks, Broadcom will solidify its role as an indispensable pillar of AI deployment—ultimately "rewriting" how Wall Street values the company's AI growth engine.

Full Disclosure: Long AVGO; Not Financial Advice; Do your own fundamental & technical research on Broadcom Inc. (AVGO).

Freightos Weekly Update - August 11, 2026

Excerpts:

Ocean rates - Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) increased 11%.

Asia-US East Coast prices (FBX03 Weekly) increased 1%.

Asia-N. Europe prices (FBX11 Weekly) decreased 8%.

Asia-Mediterranean prices (FBX13 Weekly) decreased 7%.

Analysis:

The Iran-Oman Strait of Hormuz initiative stirred some optimism last week of renewed traffic through the waterway sometime soon. But Iran’s recent, escalated, list of demands of the US – including a ban on US vessels, transit fees, and reparations for damage from US strikes – in order to make it happen has mostly dashed the renewed hopes and pushed the situation back to the familiar war time status quo of Iranian attacks, a US blockade and minimal transits.

The last few weeks have seen attacks extended via Iranian proxies to the Bab el-Mandeb Strait, Saudi ports in the Red Sea and even Egypt. Nonetheless, some container carriers have expanded or restarted some Red Sea transits paused more than once since the start of the war.

The early start to ocean peak season is translating into the anticipated early come down on Asia-Europe lanes. Carriers are increasing blanked sailings for August and cancelling or reducing planned mid-month rate increases, and spot rates are falling as well. Prices have eased about $1,000/FEU and 15% to both N. Europe and the Mediterranean since peaks in early July. Last week’s averages decreased 8% compared to the week before to about $5,000/FEU to N. Europe and $6,000/FEU to the Mediterranean, with daily rates so far this week continuing to ease slightly.

These prices are back to about mid-June levels but are still around $2,000/FEU higher than before peak season demand started in mid-May. That rates haven’t cooled more significantly just yet could point to demand still elevated but down from its peak, and to still-significant congestion at Far East hubs and disruptions from low water levels in the Rhine keeping some upward pressure on rates as well.

Transpacific rates had been moving in tandem with Asia - Europe prices since the early peak season start in late May. But in recent weeks trends have diverged. East Coast rates which had been about stable since hitting the $9,000/FEU mark in early July are up to a new high of $9,400/FEU so far this week. West Coast prices – which fell through most of July, possibly due more to capacity additions than volume drops in retrospect – have climbed $1,300/FEU since the start of the month to about $7,400/FEU so far this week, though rates are $200/FEU below their July high.

This resilience is taking most observers by surprise. Earlier this summer the NRF had projected a sharp July peak in US container arrivals followed by a significant drop in August and into September, but has now revised that outlook to more even, elevated demand through September. This shift may reflect some shippers – who had been frontloading ahead of the July tariff deadline – extending their ordering now that a sharp duty hike did not materialize. Others who may have been cautious with their peak season ordering due to so much economic uncertainty, may be increasing shipments as consumers continue to show resilience despite elevated rates of inflation.

Excerpts:

Broadcom has a major catalyst arriving in 2027

In the second quarter, Broadcom's AI semiconductor division grew at an impressive 143% pace to $10.8 billion. For 2027, Broadcom expects this division to generate at least $100 billion in revenue. That's major growth from today's level, and would make Broadcom a solid stock to buy now in anticipation of this growth.

Freightos Weekly Update - August 6, 2026

Excerpts:

Ocean rates - Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) decreased 1%.

Asia-US East Coast prices (FBX03 Weekly) stayed level.

Asia-N. Europe prices (FBX11 Weekly) decreased 1%.

Asia-Mediterranean prices (FBX13 Weekly) decreased 2%.

Analysis:

After weeks of violent escalations in US-Iran tensions surrounding the status of the Strait of Hormuz, Iran and Oman may soon announce a bilateral agreement to reopen the waterway.

The deal would open the Hormuz – without tolls or fees on transiting vessels – for sixty days, with ships entering the Persian Gulf in coordination with Iran along the northern lane, and exiting in coordination with Oman via the southern lane.

Following the failed June Memorandum of Understanding, this agreement – which may not go into effect immediately and may be contingent on the US removing its blockade of Iranian ships – will attempt to create enough stability for renewed US-Iran negotiations toward an end to the conflict. But, by validating Iranian control over the strait, the deal would mark a significant de facto concession to Iran – despite serious earlier opposition from both the US and multiple Gulf states among others – and change to the pre-war status quo.

If the strait is reopened, the rebound in traffic will be gradual and, with the main central channel still closed due to Iranian mines, may not recover to normal levels under the new arrangement.

For the container market, more vessels will exit than enter at first, with long haul ships likely to stay away until carriers are confident this ceasefire is stable. The reopening should also ease some of the strain on the landbridge alternatives in the region, though carriers may be hesitant to send feeder vessels into the Gulf at first as well. If the reopening goes smoothly and contributes to progress in US-Iran negotiations – and if developments include a Saudi Arabia - Houthi deescalation – carriers may resume earlier cautious moves back toward Red Sea transits as well.

The biggest impact of a Strait of Hormuz reopening for logistics would be on oil prices. Crude prices had eased back to pre-war levels when the ceasefire took hold in late June and early July, but then shot up 35% and past $90 a barrel by late July. The recent de-escalation has prices down 18% since late July – only 10% above the baseline – and a reopening should push prices lower. Bunker prices that climbed 16% since early July have leveled off over the past two

weeks but are still 50% higher than before the start of the war. The resumption of crude flows should start putting downward pressure on refined products like bunker and jet fuel too, though the effect may not be immediate.

Even if oil prices ease in the near term, peak season supply-demand dynamics – not fuel costs – are the major drivers of container spot rate behavior for now.

Ocean peak season started early this year, with surging demand consistently pushing rates up across the major east - west lanes from late May through early July. BAF increases and manufacturer price hikes set for Q3 drove some of the frontloading, with some US shippers pulling peak season orders forward ahead of a late July tariff deadline.

But since early July – and despite planned GRIs and PSSs including for August 1st – rates on most of these lanes have eased or at least leveled off, suggesting that the frontloading-driven peak season rush was cooling earlier than usual too.

Asia - Europe rates decreased slightly last week, but dipped by another $500/FEU so far this week. Asia - N. Europe prices of about $5,000/FEU are down 14% from their July peak, with Asia - Mediterranean rates at $6,000/FEU, 16% below the July peak and about back to mid-June levels. Some carriers have additional significant increases slated for mid-August, but rate behavior over the last few weeks and reports of easing demand and increases in blanked sailings may make rate increases unlikely.

On the transpacific, East Coast rates have been stable at their peak level of about $9,000/FEU since early July. West Coast rates reached a peak of more than $7,500/FEU in early July and through last week had eased about 20% to around $6,000/FEU.

But West Coast daily rates so far this week have jumped back above $7,000/FEU on August 1st GRIs. NRF US ocean import volume projections last month estimated that demand in August would be well below July levels. But steady East Coast rates together with some forwarder reports of surprisingly strong demand and this recent West Coast rate bump may indicate that peak season strength is lasting longer than anticipated on the transpacific.

If these rate increases stick – or climb even higher on August 1st GRIs of $2,000 - $3,000/FEU – experts are offering multiple reasons for why peak demand may be holding up past the frontloading deadlines, including unexpectedly low inventory levels and stronger than anticipated consumer demand.

Another reason may be that the July 24th tariff deadline did not result in sharp tariff hikes. Many US shippers were frontloading peak season volumes ahead of the Section 122, 10% global tariff July 24th expiration date out of concern that duties could be higher soon after. Instead, Section 122 tariffs were immediately replaced by Section 301 tariffs on more than sixty trade partners – aimed at curbing forced labor imports – of 10% to 12.5% or about even with the expiring duties.

The USTR recently stated that its 301 investigation into excess manufacturing capacity by sixteen of the largest US trading partners is nearing completion. These tariffs could raise duty levels back to those set using IEEPA. But even once the USTR shares its findings, it will take several weeks before the president could implement the recommendations. This gap may be extending tariff frontloading by some shippers, likewise contributing to a longer than expected transpacific peak.

Finally, for all lanes – including Asia - Europe trades where consensus is that demand is cooling – rates may be facing upward pressure from supply side constraints as well, since two major typhoons struck Far East ports over the last few weeks. Typhoon Noul shut down ports in southern China in late July as regional hubs were still recovering from a mid-month storm. Some carriers are now skipping Shanghai port calls as congestion remains severe there, with multi-day delays also reported in Ningbo, Shenzhen and Hong Kong.

Excerpts:

New Updates Layer Additional Defenses To VMware Cloud Foundation to Better Secure the Modern Private Cloud in the Frontier AI Era

“As AI-fueled cyberattacks and vulnerability exploits redefine the threat landscape, a fragmented security approach is no longer an option,” said Umesh Mahajan, vice president and general manager, Application Networking and Security Division, Broadcom. “With today’s updates to vDefend and Avi Load Balancer, we are giving enterprise customers the protection, performance, and automation they need to defend their application infrastructure at scale.”

Broadcom ($AVGO) traded sharply higher today, and one of the biggest developments supporting the bullish narrative is Anthropic's announcement of a massive $10 billion computing infrastructure agreement with cloud infrastructure startup Volta. While headlines naturally focus on Anthropic and Volta, I believe the market is also recognizing what this means for one of the companies sitting at the center of the AI infrastructure buildout: Broadcom.

As Broadcom CEO Hock Tan has repeatedly emphasized:

"Let the numbers speak for themselves."

When you look beyond the headline, that's exactly what they do.

Why this matters for Broadcom

The AI race is no longer about simply building larger language models.

It has become a race to secure:

• AI accelerators
• high-performance networking
• optical interconnects
• custom silicon
• power infrastructure
• long-term compute capacity

Every new multi-billion-dollar infrastructure commitment ultimately creates demand somewhere throughout this supply chain.

Broadcom occupies one of the most valuable positions within it.

Unlike companies that depend on selling GPUs into the open market, Broadcom has increasingly become the premier designer of custom AI accelerators (XPUs) and the high-speed networking required to connect hundreds of thousands—and eventually millions—of AI processors together.

That positioning gives Broadcom exposure not just to AI training, but to the massive long-term buildout of AI infrastructure itself.

Anthropic continues scaling at an extraordinary pace

Anthropic is no longer an early-stage AI startup.

It has become one of the world's largest consumers of AI compute.

Earlier this year the company announced:

• annualized revenue exceeding $30 billion
• more than 1,000 enterprise customers spending over $1 million annually
• multiple gigawatts of additional compute capacity beginning in 2027
• expanding partnerships centered around Google's TPU ecosystem—which Broadcom helps design and enable.

 

Today's reported $10 billion Volta agreement is another signal that Anthropic expects demand for Claude to continue accelerating rather than slowing.

Companies simply do not commit this level of capital unless they believe AI demand will remain extraordinarily strong for years.

Broadcom benefits even when it is not the company making the headline

This is an important point many investors overlook.

When Anthropic signs another massive compute agreement...

Broadcom does not necessarily need to be the cloud provider.

It simply needs to continue supplying the technology that enables these AI clusters.

Broadcom participates through multiple layers including:

• custom AI accelerators
• Google TPU development
• Tomahawk Ethernet switches
• Jericho networking
• optical connectivity
• AI networking silicon
• PCIe switching
• high-bandwidth data center infrastructure

Every additional AI cluster requires more networking.

More switching.

More optical connectivity.

More custom silicon.

Those are Broadcom's specialties.

The investment cycle continues getting larger

One of the biggest themes over the past two years has been concerns that AI spending would eventually slow.

Instead...

The opposite continues happening.

The world's largest AI companies are continually increasing their planned infrastructure investments.

Examples include:

• OpenAI
• Anthropic
• Google
• Meta
• Microsoft
• Amazon

Each successive funding announcement has generally been larger than the previous one.

Rather than reducing AI capex...

Companies continue raising it.

That directly supports Broadcom's long-term opportunity.

Broadcom already has remarkable visibility into future AI revenue

During recent earnings calls, Hock Tan has repeatedly discussed having a "clear line of sight" into future AI revenue.

Importantly...

That visibility is no longer theoretical.

It is increasingly supported by signed multi-year customer commitments.

Among the major developments announced over the past year:

Google TPU expansion

Broadcom continues serving as Google's primary custom silicon development partner for successive TPU generations.

Google and Broadcom also disclosed a long-term supply relationship extending through 2031, significantly improving revenue visibility. 

Anthropic compute expansion

Anthropic expanded its partnership with Google and Broadcom for multiple gigawatts of next-generation TPU capacity expected to begin coming online in 2027.

The company described this as its largest compute commitment ever. 

AI XPV Platform

Broadcom recently announced the launch of its AI XPV Platform alongside Apollo and Blackstone.

The initiative is designed to accelerate deployment of more than 20 gigawatts of AI infrastructure using Broadcom's XPUs and networking technologies through 2028.

The platform launched with an initial $35 billion transaction supporting Anthropic's expanding infrastructure requirements and is intended to finance future deployments for leading frontier AI labs. 

Multiple hyperscale XPU customers

Broadcom has repeatedly stated that it is working with multiple hyperscale customers on custom AI accelerators.

Management has indicated these programs represent one of the largest custom silicon opportunities in semiconductor history.

Each successive customer moving into production meaningfully expands Broadcom's long-term revenue opportunity. 

The networking opportunity is just as important as the chips

Investors often focus exclusively on AI accelerators.

However...

As clusters grow toward hundreds of thousands of processors...

Networking becomes equally important.

Broadcom is arguably the industry leader in:

• AI Ethernet fabrics
• high-speed switching
• optical interconnects
• data center networking silicon

Every new AI cluster requires thousands of networking components that allow the accelerators to function as one massive distributed computer.

Without networking...

The accelerators cannot efficiently communicate.

That creates another powerful growth engine alongside Broadcom's custom silicon business.

Why today's news matters

The Volta agreement is not simply one more cloud contract.

It represents another piece of evidence that:

• frontier AI demand continues accelerating
• AI infrastructure investment continues growing
• compute shortages remain real
• enterprise AI adoption continues expanding
• customers are willing to commit billions of dollars years in advance

All of those trends support Broadcom's long-term AI thesis.

The numbers continue supporting management's confidence

One reason many long-term Broadcom shareholders remain optimistic is because management has consistently backed its outlook with measurable execution.

Recent highlights include:

• AI semiconductor revenue has continued growing at triple-digit year-over-year rates.
• Broadcom has reported AI bookings substantially exceeding current shipments, indicating demand remains ahead of supply.
• Management has guided to approximately $56 billion in AI semiconductor revenue for fiscal 2026 and reiterated a path to more than $100 billion annually in fiscal 2027, supported by long-term customer commitments rather than speculative demand forecasts.

 

Those are extraordinary numbers.

Final thoughts

Today's Anthropic–Volta announcement reinforces a trend that has become increasingly difficult to ignore.

The largest AI companies are not slowing their infrastructure investments.

They are accelerating them.

Every major compute announcement strengthens the broader AI ecosystem—and Broadcom sits at one of its most critical intersections through custom silicon, AI networking, and long-term hyperscaler partnerships.

As Hock Tan has consistently said, Broadcom's outlook is built on clear line-of-sight customer commitments, not wishful thinking.

With Anthropic continuing to expand at an exceptional pace, hyperscalers investing aggressively, and AI infrastructure spending showing few signs of slowing, today's news appears to be another data point supporting the long-term investment thesis.

Sometimes the best way to evaluate a company is simply to let the numbers speak for themselves.

Long AVGO. Not financial advice. Please do your own due diligence.

Hyperscalers increasing their CapEx spending…

And, Broadcom Inc. $AVGO is the market leader in both ASICs & Networking.

Long Term Investor in $AVGO for the Long Term.

Freightos Weekly Update - July 28, 2026

Excerpts:

Ocean rates - Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) decreased 12% to $6,212/FEU.

Asia-US East Coast prices (FBX03 Weekly) decreased 1% to $9,002/FEU.

Asia-N. Europe prices (FBX11 Weekly) decreased 3% to $5,575/FEU.

Asia-Mediterranean prices (FBX13 Weekly) decreased 2% to $6,697/FEU.

Excerpts:

The One Powerful Reason: Custom Silicon Is Eating the AI Buildout

Broadcom’s AI semiconductor revenue climbed from $5.20 billion in Q3 FY2025 to $10.80 billion last quarter, up 143% year-over-year. Management guided Q3 FY2026 AI revenue to $16.0 billion, growth over 200%. Bookings for AI semiconductors reached over $30 billion against $10.8 billion shipped. Hock Tan told the Street plainly: “Demand for XPUs and networking is simply insatiable.”

The Cash Machine Behind the Story

The receipts back the excitement. Q2 FY2026 free cash flow hit $10.26 billion, or 46% of revenue. 

For a retirement-oriented account, capital return matters. Broadcom pays a $0.65 quarterly dividend, raised 10% in Q4 FY2025 and marking the 15th consecutive annual increase since fiscal 2011. Q1 FY2026 buybacks totaled $7.8 billion, another $600 million came in Q2, and a fresh $10 billion authorization runs through year-end.

My thesis holds because the multi-year commitments are contractual. Anthropic has locked in 5 gigawatts of next-generation TPU-based compute beginning 2027, OpenAI is contracted for 10 gigawatts by 2029, and Meta signed for 3 gigawatts through end of 2028. That visibility pays me to wait through any drawdown.

Why the Buy Button Stays Active

I keep buying because Broadcom sits at the chokepoint of the AI capex cycle, generates cash like a utility, and returns it like a compounder. Every quarter Hock Tan reports, the moat widens.

Freightos Weekly Update - July 21, 2026

Excerpts:

Ocean rates - Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) decreased 6%.

Asia-US East Coast prices (FBX03 Weekly) stayed level.

Asia-N. Europe prices (FBX11 Weekly) decreased 2%.

Asia-Mediterranean prices (FBX13 Weekly) decreased 4%.

Analysis:

The US and Iran have traded strikes for ten days straight, with Iranian actions also targeting neighbor states and area vessels, and missile attacks reaching as far as US positions in Jordan. Traffic through the Strait of Hormuz has again slowed to a trickle, and the conflict has now extended to the Bab el Mandeb strait as well. 

Saudi Arabia and the Houthis have had a ceasefire in place since 2022, but tensions increased recently as Saudi Arabia fired at Sanaa airport, preventing a flight from Iran to land. In response, the Houthis, who have not attacked passing vessels since late last year, announced that the Red Sea channel is now closed to all Saudi-linked vessels and ships calling at Saudi ports. 

The Saudis have diverted a significant share of pre-war oil flows away from the Strait of Hormuz via pipelines reaching Jeddah Port in the Red Sea, where volumes continue on by tankers passing Yemen on their way east. Container carriers are also diverting some Gulf traffic through Jeddah, though most major carriers get there via the Mediterranean and northern Red Sea, still avoiding the Houthi choke point. So the new closure would likely be a bigger blow to energy flows than to the container market, but could see carriers like CMA CGM and Maersk backtrack on recent steps back toward Red Sea transits, as well as disrupt regional carriers who were still passing through the Bab el Mandeb for Saudi calls.

Oil prices are facing upward pressure from the recent deteriorations. Crude prices are now up 20% since an early July low and are back to mid-June levels. Bunker prices are up 12%, erasing more than a month of decline too, with jet fuel rates up 25% and back to mid-May levels – 50% higher than the pre-war baseline.

But even with fuel prices rising, container rates are easing – slightly – for the first time since April, as carriers add capacity to some lanes and an early unwind from an early peak season begins.

Carriers had announced significant GRIs and PSSs for July 15th, but instead spot rates declined slightly across the major east-west lanes, with Asia - N. America East Coast prices staying level. Daily rates so far this week show West Coast and Asia - Mediterranean prices continuing to slide. That carriers decided against the mid-month hikes suggest that recent projections of cooling demand after a red hot, frontloaded, June and early July may be playing out now. 

This likely demand decrease is coinciding with the arrival of extra loaders sent to service the surging demand that are increasing capacity, and contributing to the flat or easing rates as well. The capacity aspect may explain the slight discrepancy between transpacific West and East Coast rates, as more vessels were added to West Coast services.

At the same time, serious port congestion is absorbing capacity in the Far East, which may mitigate the degree of downward pressure there otherwise would be on spot rates via the current demand dip and capacity additions. Delays at major origin ports, initially caused by surging volumes, have increased from bouts of bad weather, including from last week’s Typhoon Bavi.

The storm temporarily shut down several major ports, leading to serious vessel bunching in Shanghai and Ningbo, multiple-day waits in Qingdao, and delays at other ports in eastern China, Taiwan, S. Korea and the Philippines. Some carriers are omitting port calls and diverting volumes to alternatives in the region, which will then move on by transhipment and also contribute to delays. A recent toxic gas leak in Antwerp also shut down operations at several terminals temporarily. 

One reason for the US ocean import pull forward was the July 25th tariff deadline at which point 10% global Section 122 tariffs will expire. The White House is working to replace those with 10% - 12.5% Section 301 tariffs on sixty trading partners targeting forced labor issues. Experts expect the administration will be able to roll out those tariffs – which keep duties about level with the current status quo – by or soon after the deadline. 

The government has also launched 301 investigations into excess capacity violations by sixteen countries. But the USTR has still not released its findings for this inquiry or set a date for public comments, leading some to speculate that the government intends to wait until after midterm elections to move forward with these duties which could push tariffs back to IEEPA levels. President Trump also announced that he will put 50% tariffs into effect on about 5% on Canadian exports in thirty days using a different section of the US trade law.

Note: Acrete Research is just that — a research firm. More information on Acrete Research:

Arete Research is an independent equity research firm founded in 2000, specializing in technology, media, and telecom (TMT) sectors for institutional investors without the conflicts of investment banking. Based in London, the firm provides analysis on companies like Broadcom, recently maintaining a buy rating on the tech giant. Read the full firm profile at Arete Research.

Excerpts:

The case for Broadcom on top

Broadcom has become one of the essential suppliers of the artificial intelligence (AI) era. It designs the custom chips that companies like Alphabet, Meta Platforms, and Anthropic use to run their AI systems, and it dominates the networking gear that ties thousands of those chips together inside a data center. Management has projected that custom AI chip revenue will exceed $100 billion annually by 2027, and demand continues to grow as major AI players race to build more computing power. 

That is the key to my prediction. The AI build-out is arguably the largest infrastructure project of our lifetime, and Broadcom sells the picks and shovels at its center. Apple and Microsoft are magnificent businesses, but their growth engines, iPhones and enterprise software, are more mature. Broadcom is leveraged directly to the raw expansion of AI compute, which is growing far faster. When the fastest-growing slice of an industry compounds long enough, the leaderboard eventually reshuffles.

Excerpt:

Three sources told Reuters that the proposal has been discussed by Iran’s leadership and conveyed to the Houthis, while a source close to the Yemeni group claimed missiles and drones have already been deployed near the strategic waterway. The group is now said to be awaiting an order to begin targeting shipping.

Excerpts:

VMware Cloud Foundation to deliver a secure, unified private cloud platform driving global operational resilience and banking innovation

John Sharratt, Global Head of Technology and Infrastructure, Standard Chartered, said, “Standardizing a fully virtualized software-defined infrastructure across our global operations enables Standard Chartered to meet the evolving demands of our clients while strengthening our technological core with the responsiveness, resilience and regulatory compliance that global banking demands. Our client-centric, long-term investments with global service providers, such as Broadcom, strengthen our ability to deliver always-on banking services in an ever changing and dynamic landscape, while accelerating innovation with a secure private cloud foundation.”  

“Global financial institutions require infrastructure that combines resilience, security and operational simplicity at scale,” said Krish Prasad, senior vice president and general manager, VMware Cloud Foundation Division, Broadcom. “Standard Chartered is at the forefront of digital banking innovation, and we are proud to support their journey toward a highly automated, AI-driven, modern private cloud with VMware Cloud Foundation,” he added.