ChatGPT Sells Broadcom (AVGO) and Buys This Online Retailer

• CHWY
• AVGO

ChatGPT recently sold all of its Broadcom Inc. (NASDAQ:AVGO) shares and moved the money into Chewy, Inc. (NYSE:CHWY) AI Finance Labs is a project run by University of Florida finance professor Alejandro Lopez-Lira that runs stock portfolios managed by AI models. Chewy was part of Insider Monkey’s list of the10 Mid Cap Stocks to Own for Decades According to Hedge Funds

ChatGPT said Broadcom’s rally left the stock dependent on its biggest AI customers raising spending again in late October, and it did not want to hold that risk through those updates. Seewhat Jim Cramer said about Broadcom. It put the full 7.59% position into Chewy, which trades near its annual low and sells pet food and supplies that customers buy every month. It also named Chewy’s Dec. 9 earnings report as the test of whether the lower Chewy+ membership price keeps customers without hurting profit.

Why Chewy Shares Have Struggled

Chewy is an online retailer that sells pet food, supplies and health products in the US. Q2 sales rose 7.3% year over year, and 5.7% excluding the SmartPak and Modern Animal acquisitions. Active customers grew 3.8% to 21.7 million, and Autoship customers made up about 85% of sales. Chewy also raised its fiscal 2026 sales outlook to growth of 6.8% to 7.7%.

The stock still fell after the report. Pet owners are trading down to cheaper brands and cutting back on treats and hard goods, and the company says the pet market has not recovered.

Chewy has alasting edge in online pet supplies because about 85% of its sales come from Autoship customers who reorder food and medicine on a schedule. That recurring base keeps sales steady when pet owners cut back elsewhere, and it makes each customer worth more over time. The company says the consumables market is flat while its own sales grow in the mid-single digits, so it is taking share from other retailers.

Chewy is also adding higher-margin businesses, including Chewy Vet Care clinics, pharmacy, the Chewy+ membership and advertising. Each one gives it a way to earn more from the customers it already has. If pet ownership picks up again, Chewy has a large customer base and a delivery network ready to benefit.

The main risk is that pet spending stays weak for longer than analysts expect. New pet adoptions have been soft since COVID-19, andshoppers are buying fewer treats, toys and premium food, which caps how fast Chewy can grow. Amazon and Walmart sell the same food and supplies, so Chewy has to keep prices low to hold its customers.