10 Best Stocks to Buy and Hold For 5 Years

5. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 130

Broadcom Inc. (NASDAQ:AVGO) designs and develops a range of semiconductor products and is well known for making application-specific integrated circuits (ASICs). It also provides infrastructure software products. Some of its products include cable modems, networking processors, and storage adapters. The company serves the data center, networking, software, broadband, storage, and wireless markets.

The company has been performing exceptionally throughout the year, having launched breakthrough technologies that facilitate the management of large datasets for AI tasks and scalable AI systems. Fast forward to November 5th, the company unveiled VeloRAIN, a platform that uses artificial intelligence and machine learning to improve the performance of AI security workloads. On the same day, the company’s VMware Cloud Foundation unveiled a private cloud platform to improve customers’ AI autonomy and security.

In the fourth quarter of 2024, Broadcom Inc. (NASDAQ:AVGO) expects revenue from AI to grow by 10% sequentially to $3.5 billion, bringing the full-year total to $12 billion, driven by ethernet networking and custom accelerators for AI data centers. Overall, consolidated revenue and net income grew by 47% and 44%, respectively, during the third quarter of 2024, driven by growing AI revenue and VMware bookings.

Broadcom Inc.’s (NASDAQ:AVGO) cloud computing platform for enterprises promises a solid growth opportunity as it leverages artificial intelligence. In addition to that, company officials believe AVGO is finally achieving stability on a company-wide level and is on track to becoming an AI powerhouse.

ClearBridge Investments’ ClearBridge Large Cap Value Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its 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.”