5. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) is a semiconductor manufacturing company that designs, develops, and supplies semiconductor and software infrastructure products. Some of its products include cable modems, networking processors, and storage adapters.
Broadcom Inc. (NASDAQ:AVGO) is one of the most prominent stocks to buy and hold and we say that because in 2024, the company extended its AI workload to deliver the industry’s first switch platform for scalable AI systems. The company also launched a new technology, Retimers, that helps computers process huge amounts of data for AI tasks. Both these innovations are breakthroughs for AI infrastructure.
In addition to that, Broadcom Inc. (NASDAQ:AVGO) recently partnered with Comcast, and Charter Communications to make chipsets capable of running on high speed. Previously in August, the company launched an on-premise version of its enterprise agility platform. The on-premise version will allow businesses to plan, prioritize, manage, and track activities in real-time.
In the fiscal third quarter of 2024, the company’s revenue was $13.1 billion, up by 47% year-over-year, driven by the growing demand for AI and its cloud platform, VMware. In the fourth quarter of 2024, Broadcom expects revenue from AI to grow by 10% sequentially reaching $3.5 billion, bringing the full-year total to $12 billion.
Overall, Broadcom Inc. (NASDAQ:AVGO) has an upward growth trajectory for the foreseeable future. Such can be attributed to the expanding demand for artificial intelligence and data and storage capabilities.
Aristotle Atlantic Partners mentioned Broadcom Inc. (NASDAQ:AVGO) in its Q2 2024 investor letter. Here is what the firm said:
“Broadcom is a global technology leader that designs, develops and supplies a broad range of semiconductor and infrastructure software solutions. The company strategically focuses its research and development resources to address niche opportunities in target markets and leverage its extensive portfolio of U.S. and other patents and other intellectual property to integrate multiple technologies and create system-on-chip component and software solutions that target growth opportunities. Broadcom designs products and software that deliver high performance and provide mission-critical functionality. The company has a history of innovation in the semiconductor industry and offers thousands of products that are used in end products such as enterprise and data center networking, home connectivity, “set-top boxes broadband access”, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom differentiates itself through its high-performance design and integration capabilities and focuses on developing products for target markets where it believes it can earn attractive margins.
We view Broadcom’s semiconductor business as being very well positioned to benefit from secular growth in data center networking, which is being driven by AI and cloud computing. The company continues to invest in research and development, and we see this as a competitive advantage for the company. Broadcom’s infrastructure software business is a recurring revenue business model that provides mission-critical mainframe support software to its customer base. The recent VMware acquisition will enhance this business strategy and accelerate the growth rate of this business unit, as VMware’s product suite includes key tools for AI server upgrades. Our long-term investment thesis is supported by Broadcom’s success in its strategy of maintaining technology and market share leadership in mission-critical markets with high switching costs and deep profit pools.”
