10 Best Cybersecurity Stocks To Buy According To Hedge Funds

1. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Investors  in Q1 2024: 115

Broadcom Inc. (NASDAQ:AVGO) is one of the biggest semiconductor companies in the world. At the same time, its major move in the cybersecurity industry in 2022 was well time when Broadcom Inc. (NASDAQ:AVGO) acquired Symantec’s security business and ended up reducing the cost base by as much as 70% to streamline revenue growth and divert funds towards growth. Along with its Symantec Enterprise Cloud cybersecurity platform, Broadcom Inc. (NASDAQ:AVGO) also provides a plethora of other cybersecurity products such as payment, mainframe, network, endpoint, and identity security. Additionally, its semiconductor design capabilities allow Broadcom Inc. (NASDAQ:AVGO) to offer secure processors for a variety of important devices such as point of sale systems. Following its acquisition of cloud computing company VMware, 60% of Broadcom Inc. (NASDAQ:AVGO)’s business is now software. This provides it with access to a high margin and recurring revenue business, and it can target existing enterprise customers not only with cybersecurity products but also custom AI chip designs which are the talk of the town these days with big ticket names such as OpenAI interested in them.

ClearBridge Investments mentioned Broadcom Inc. (NASDAQ:AVGO) in its Q1 2024 earnings call. Here is what the firm said:

“Among secular growth names, Broadcom was another notable addition. Through organic growth and accretive acquisitions, Broadcom has developed into one of the largest global technology providers serving a number of industries with its semiconductor and software products. The company generates high levels of earnings and free cash flow, which will be driven in the coming years by revenue growth and margin expansion due to the acquisition of VMware and strong adoption of the Broadcom’s AI custom silicon chips.”

AVGO tops the list of hedge fund cybersecurity stock picks. But our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AVGO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None.