10 Best Tech Stocks For Long Term Investment

8. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 128

Broadcom Inc. (NASDAQ:AVGO) is a semiconductor and infrastructure software company. While it’s known for its ASICs (Application-Specific Integrated Circuits), it provides a range of products like cable modems, networking processors, and storage adapters. It serves key markets including data centers, networking, software, broadband, storage, and wireless.

This year, the company launched cutting-edge AI technologies, including the VeloRAIN, an AI-powered security platform, and a private cloud platform for enhanced AI autonomy and security. Driven by strong demand for ethernet networking and custom AI accelerators, the company expects AI revenue to reach $3.5 billion in Q4 2024, contributing to a projected full-year AI revenue of $12 billion.

The company recently announced an advancement in its custom chip technology. Recognizing the surge in demand for GenAI, it has developed 3.5D XDSiP, a solution designed to enhance the speed and performance of custom AI processors. This technological leap is crucial for Broadcom Inc.’s (NASDAQ:AVGO) growing customer base of hyperscalers, who are increasingly relying on custom chips to diversify their supply chains and reduce dependence on expensive NVIDIA processors.

Its focus on developing groundbreaking technologies serves as a key competitive advantage. Broadcom Inc. (NASDAQ:AVGO) is now achieving greater stability and is well-positioned to become a dominant force in the technology landscape.

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.”