We recently published a list of Top 10 Stocks Everyone is Talking About. In this article, we are going to take a look at where Broadcom Inc. (NASDAQ:AVGO) stands against other top stocks everyone is talking about.
Investors are on tenterhooks amid the latest selloff as they keep up with President Donald Trump’s volatile tariff policies and assess the slowing enthusiasm in the AI trade. Trivariate’s Adam Parker said in a latest program on CNBC that while he wants to be bullish on the stocks for a rebound, he believes we haven’t seen the bottom yet. The analyst recommends going on the defense:
“I mean every part of me wants to get bullish again, right? You know, we had the good call of saying the market will be down in the first half and choppy with concerns about tariffs and all that. And you know, now we’ve seen a lot of people who were bullish before throwing in the towel and getting bearish, and I really want to do it, right? But I can’t. And the reason is because I don’t think we’ve seen enough of a blowoff on the positioning. I mean, if you look at the companies that were talking at big conferences in March, a lot of things are slowing. And so I think this is more than a growth scare already—this is actually like a growth slowdown. And so the question is, will we get negative guidance in April? Will we see companies guide down and the stocks not go down? If I see that behavior, then I’ll probably want to get more risk on. But until then, I think we have to play a little bit more defense.”
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For this article, we picked 10 stocks Wall Street analysts are showing interest in. With each stock, we have mentioned their hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician working at a magnified microscope, developing a new integrated circuit.
Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Funds Investors: 128
Steven Dickens from HyperFRAME Research explained in a latest program on Schwab Network why he is bullish on Broadcom Inc. (NASDAQ:AVGO).
“We’re starting to see some of the macro trends play out here. Obviously, the VIX is up, there’s a lot of volatility, and people are worried about some of the tariffs and some of the posture. But I think what I track from a Broadcom perspective is: are they exposed to the right markets, have they got that product innovation cycle rolling, and are they executing? I think on all three of those, I give them a 10 out of 10. This company’s firing on all cylinders. Hock Tan is certainly starting to step up to be one of what I describe as the mag 8, we are gonna see this company continue to grow.”
Broadcom threw it out of the park with its latest quarterly results. The most important part of the report? The company expects strong AI semiconductor sales growth to continue. It sees AI semiconductor revenue of about $4.4 billion in fiscal Q2, which would be a 42% year-over-year growth. Broadcom reported $6 billion in free cash flow for the quarter. Its software business gross margin came in at about 90%. But what’s Broadcom’s moat? It makes ASIC, chips designed for specific applications and tasks. As major companies look for custom chips to break Nvidia monopoly and lower costs, Broadcom is positioned well to thrive. Many top AI spenders are teaming up with Broadcom to develop these chips, which are expected to be high-margin, high-volume products, potentially driving substantial growth in both revenue and profits.
Broadcom Inc. (NASDAQ:AVGO) continues to be a leader in the AI ASCI and networking chips market. Broadcom (NASDAQ:AVGO) has 3nm AI ASIC chip deals with Alphabet and Meta in addition to many other tech giants aiming massive spending for AI hyperscaling.
Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q4 2024 investor letter:
“Broadcom Inc. (NASDAQ:AVGO) soared after the company reported quarterly results in December that defied expectations and further solidified the company’s already compelling AI narrative. The technology infrastructure powerhouse with leading positions across wireless, data center networking, AI semiconductors and infrastructure software reported strong results, including the usual prodigious cash flow generation, resulting in a double-digit increase to its dividend. More importantly, investors cheered the increased clarity concerning the company’s AI market opportunity, now estimated at $60 to $90 billion by 2027, up from $15 to $20 billion in 2024. This sizable uptick — and increased confidence provided by the management team about the AI opportunity — drove a re-rating in the stock and the company’s market cap eclipsed $1 trillion in value.”
Overall, AVGO ranks 3rd on our list of top stocks everyone is talking about. While we acknowledge the potential of AVGO, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AVGO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
