20 Best Data Center Stocks to Buy According to Billionaires

2. Broadcom Inc. (NASDAQ:AVGO)

Number of Billionaire Investors: 25

Billionaire Holdings: $14.5 billion

Number of Hedge Fund Holders: 161

Broadcom Inc. (NASDAQ:AVGO) is a semiconductor company that designs, develops and supplies a broad range of semiconductor and infrastructure software solutions. Its products are used in end products such as enterprise and data center networking, including AI networking and connectivity, home connectivity, broadband access, smartphones and base stations, data center servers and storage systems, and factory automation.

Broadcom Inc. (NASDAQ:AVGO) witnessed strong year-over-year growth in its Q1 2025 (FY ending in November) revenue of $14.9 billion (+25% YoY). Among the segments, AI revenue in the quarter rose 77% year-over-year to $4.1 billion and infrastructure software revenue grew 47% to $6.7 billion. As evidence of strong profitability, adjusted EBITDA increased 41% YoY to around $10 billion and free cash flow rose 28% to $6 billion. Interestingly, the company reaffirmed that they are in discussion with three hyperscale customers who will generate a Serviceable Addressable Market (SAM) in the range of $60 billion to $90 billion in fiscal 2027.

After the earnings release, a Truist Financial analyst increased the price target for Broadcom’s shares from $260 to $267, while reaffirming a Buy rating. The analyst noted that although Q1 results exceeded expectations, Q2 guidance was largely driven by AI-related growth, which helped counteract weakness in Broadcom’s legacy semiconductor markets. Additionally, the analyst highlighted management’s mention of four “pre-customers” that have the potential to significantly boost annual sales growth beyond 30%, a pace described as “stunning.”