8 Most Profitable Tech Stocks Right Now

5. Broadcom (NASDAQ:AVGO)  

Number of Hedge Fund Holders: 130  

TTM Net Income: $5.09 Billion  

5-Year Net Income CAGR: 11.23%

Broadcom (NASDAQ:AVGO) is a global technology company that designs, develops, and supplies semiconductor and infrastructure software solutions. The company’s products include chips for networking, broadband, enterprise storage, and wireless communication. Broadcom (NASDAQ:AVGO) serves a wide range of industries, including telecommunications, data centers, and industrial sectors.

Broadcom (NASDAQ:AVGO) is well-positioned to capitalize on the growing demand for AI semiconductors. According to Precedence Research, the global artificial intelligence (AI) in semiconductor market size was $56.42 billion in 2024 and is expected to reach around $232.85 billion by 2034, expanding at a CAGR of 15.23%. Broadcom (NASDAQ:AVGO) has already secured major AI customers, including Google, Meta, and ByteDance, and is poised to add a fourth major customer, Microsoft’s OpenAI. Broadcom’s (NASDAQ:AVGO) AI-specific chip designs are tailored for customized workload demands which has enabled it to cater to the exact specifications required by hyperscale cloud providers.

Broadcom’s (NASDAQ:AVGO) AI-related revenues are on a steep growth trajectory, with estimated fiscal 2024 AI revenues of $12 billion and $16 billion in fiscal 2025, representing a 33% year-over-year growth rate. The company’s custom AI accelerators have seen a 3.5 times year-over-year growth, and its AI revenue contribution has increased from less than 5% of semiconductor solution revenues in fiscal 2019-2021 to 35% in fiscal 2024.

Broadcom’s (NASDAQ:AVGO) acquisition of VMware has yielded significant returns, with a 200% year-over-year increase in infrastructure software revenue and a $3.8 billion contribution from VMware in Q3. The integration of VMware into Broadcom’s (NASDAQ:AVGO) business has led to a 32% quarter-on-quarter increase in annualized booking value for VMware Cloud Foundation.

Broadcom (NASDAQ:AVGO) is well-positioned to dominate the AI semiconductor market, with a growing revenue contribution from AI. The company is expected to increase its earnings by 13.27% this year, its leadership in AI-specific semiconductors, custom chip designs, and strong foothold in the AI ecosystem solidify its position as a key player in the industry, driving long-term growth and market leadership.