We recently published a list of Top 10 Trending AI Stocks to Watch in November. In this article, we are going to take a look at where Broadcom Inc (NASDAQ:AVGO) stands against other trending AI stocks to watch in November.
Amid soaring valuations of AI stocks, beginner investors keep wondering whether they are too late to the AI party. However, investing experts believe that opportunities abound in the AI space because of the nature of this technological revolution.
While talking to Wall Street Journal during the WSJ Tech Live Conference, venture capitalist Martin Casado, a general partner at Andreessen Horowitz, explained why he believes there is no such thing as “too late” when it comes to AI for now.
“When it comes to AI, it really feels like the marginal cost of language, reasoning and creation are going to zero. And if that’s the case, this is a supercycle. And if that’s the case, we’ve got decades. So there’s no “too late.” In that sense, we’re still very, very early.”
The AI revolution is quickly entering the phase where we are seeing real-life use cases as AI is helping companies significantly reduce costs and increase efficiency. According to a detailed report published by Benesch’s AI Commission, an AI-based tool that monitors real-time data from electronic medical records reduced unexpected deaths in hospitalized internal medicine patients by 26%.
Casado also talked about the usability of AI models for actual problem-solving:
“Everybody looks at the OpenAIs. But as far as value creation and integration, if you look at all the private companies, the smaller companies that are building their own smaller models, they are some of the fastest-growing companies we’ve seen in the history of the industry.”
Also Read 10 Best Healthcare Stocks to Buy According to Hedge Funds and 10 Best Mid-Cap Healthcare Stocks to Buy Now.
For this article we picked 10 AI stocks trending on latest news and earnings. With each stock we have mentioned the number of hedge fund investors. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Broadcom Inc (NASDAQ:AVGO)
Number of Hedge Fund Investors: 130
Bill Baruch, President, Blue Line Futures, recently said while talking during a program on CNBC:
“It’s breaking out. The stock looks terrific. If you look outside of Nvidia, it’s been the best performing. It’s the diversification they have as well with the subscription business and the infrastructure building within that space. I think this name is going to continue to rise. We hold it not only in our main portfolio but in our concentrated portfolio.”
UBS recently published a list of stocks it believes will be industry leaders by 2030. UBS believes the next decade will favor companies that use technology to disrupt industries.
“We see these as leading disruptors in industries undergoing technological change, which should have a lasting impact,” said UBS analyst Hartmut Issel in a note.
The firm identified 29 companies it expects to deliver stronger earnings growth than the broader market (S&P 500, NASDAQ), supported by “positive, long-term trends,” according to Issel.
Broadcom Inc (NASDAQ:AVGO) was among these stocks in the Enabling Tech category.
According to UBS, revenue for enabling tech could rise to $1.2T by 2025, or ~15% CAGR from FY20–25.
Broadcom Inc (NASDAQ:AVGO) continues to be a leader in the AI ASCI and networking chips market. The company expects about $12 billion in AI revenue in fiscal 2024, which means 20% of its total revenue will come from AI and counting.
Broadcom Inc (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.
The company’s Ethernet business is also strong amid partnerships with Arista Networks (ANET), while the company is also collaborating with Dell (DELL), Juniper (JNPR), and Super Micro (SMCI) in the networking business and other segments.
ClearBridge Large Cap Value Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q3 2024 investor letter:
“In IT, we bought Broadcom Inc. (NASDAQ:AVGO) as we believe the company has a long runway for growth with its custom silicon business, which should be more durable and less volatile than other components within the AI food chain. We also believe the acquisition of VMware creates another opportunity for steady, subscription-based durable growth that is still in its early innings. We believe the stock has an attractive risk/reward profile given the reasonable visibility toward mid-teens EPS growth at a low-20s P/E multiple. We made room for Broadcom by exiting Lam Research, whose shares we believed priced in a full recovery, while we grew increasingly concerned that China exposure might create an air pocket.”
Overall, AVGO ranks 7th on our list of trending AI stocks to watch in November. 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 timeframe. 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.
