10 Stocks That Will Make You Rich in 5-10 Years

4. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders as of Q2: 130

Broadcom Inc. (NASDAQ:AVGO) is one of the top technology companies, having made a name for itself in developing and supplying semiconductor devices. While Nvidia is a leader in artificial intelligence graphics, Broadcom is making a mark on application-specific integrated circuits (ASICs)

The company is gaining traction in a growing market and currently produces the top ASICs used by businesses needing general-purpose AI chips, such as large tech companies like Meta and Alphabet. J.P. Morgan projects the addressable market for Broadcom Inc. (NASDAQ:AVGO)’s custom AI chips could reach $150 billion over the next four to five years, thanks to the company’s pioneering efforts in this field.

Artificial intelligence (AI) is a major factor in Broadcom Inc. (NASDAQ:AVGO)’s business growth. More precisely, Broadcom stated in June that it was expected to sell over $11 billion worth of AI chips this year. The company’s AI-focused chip sales more than tripled to $3.1 billion in the second quarter.

Not only is that incredible year-over-year growth, but Broadcom’s AI sales accounted for an impressive 24% of the company’s sales in the quarter, total revenue totalling $13.1 billion.

During the earnings call, Broadcom Inc. (NASDAQ:AVGO) CEO Hock Tan stated that “customers continue to scale up and scale out their AI clusters” and that the demand for custom AI accelerators is still growing. As chip customers keep returning for more, the company should generate more revenue and earnings to return to shareholders.

Here is what Columbia Threadneedle Global Technology Growth Strategy said about Broadcom Inc. (NASDAQ:AVGO) in its Q2 2024 investor letter:

“Broadcom Inc. (NASDAQ:AVGO) also performed well during the quarter, as the company reported better-than-expected earnings, with an upside from demand related to AI. This long-term holding is strongly positioned to benefit from continued AI demand, with AI sales in the quarter up 400% over the prior year. Overall, AI-related revenue accounted for 30% of total revenue in 2024 and is on pace to represent a majority of the company’s revenue within two to three years.”