10 Best-Performing S&P 500 Stocks in the Last 3 Years

7. Broadcom Inc. (NASDAQ:AVGO)

3Y CAGR: 55.87%

Broadcom (NASDAQ:AVGO) has been one of the most profitable stocks in the S&P500 index over the past few years. The company has been very successful in its patent portfolio strategy by acquiring other tech companies by leveraged buyouts. Some of its recent acquisitions include CA Technologies and VMware, with VMware being especially prominent.

Further, Broadcom is the biggest player in the custom silicon market that lets other companies design their own AI accelerators, which are increasingly opting for specific chips for specific use cases.

Following is what Clearbridge Large Cap Value strategy had to say about AVGO in their Q3, 2024 investor letter:

“In IT, we bought Broadcom Inc. (NASDAQ:AVGO) as we believe the company has a long runway for growth with its custom silicon business, which should be more durable and less volatile than other components within the AI food chain. We also believe the acquisition of VMware creates another opportunity for steady, subscription-based durable growth that is still in its early innings. We believe the stock has an attractive risk/reward profile given the reasonable visibility toward mid-teens EPS growth at a low-20s P/E multiple. We made room for Broadcom by exiting Lam Research, whose shares we believed priced in a full recovery, while we grew increasingly concerned that China exposure might create an air pocket.”