7 Best Semiconductor Stocks to Buy Now

3) Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 128

Broadcom Inc. (NASDAQ:AVGO) is a leading global semiconductor company, which is engaged in designing, developing, and supplying a range of semiconductor and infrastructure software solutions. In FY24, Broadcom Inc. (NASDAQ:AVGO)’s semiconductor revenue came at a record $30.1 billion, driven by AI revenue of $12.2 billion. AI revenue, which increased 220% YoY, was fueled by its leading AI XPUs and Ethernet networking portfolio. The fundamentals of the company’s cyclical semiconductor businesses are now stabilizing, with most sectors well-placed for recovery in fiscal year 2025.

The infrastructure software business continues to see positive momentum, with healthy conversions and upsells to its VCF full-stack solution. Broadcom Inc. (NASDAQ:AVGO) has maintained a stable revenue growth trajectory despite fluctuating revenues due to delayed deals. Furthermore, the analysts are optimistic about the company’s expanding Serviceable Addressable Market (SAM). Morgan Stanley upped its price target on the company’s shares from $233.00 to $265.00, giving an “Overweight” rating on 20 December.

Broadcom Inc. (NASDAQ:AVGO) has 3 hyper-scale customers who have developed their own multi-generational AI XPU roadmap to be deployed at different rates during the upcoming 3 years. As per the company’s CEO, in 2027, the company believes each of them plans to deploy 1 million XPU clusters throughout a single fabric. Therefore, Broadcom Inc. (NASDAQ:AVGO) anticipates this to represent an AI revenue SAM (serviceable addressable market) for XPUs and networking of between $60 billion – $90 billion in fiscal 2027.