We recently compiled a list of the 10 AI News You Shouldn’t Miss. In this article, we are going to take a look at where Broadcom Inc. (NASDAQ:AVGO) stands against the other AI stocks you shouldn’t miss.
John Lovelock, Chief of Research for Global IT Forecasting at Gartner, joined CNBC’s Worldwide Exchange to discuss the major catalyst for IT spending in 2025: Generative AI. He states that companies are now moving from cost-saving optimizations and any upgrading they have been focused on for the past eighteen months, with growth back on their agenda. For 2025, “they are shifting back to growth”, he says, emphasizing the need for GenAI to boost revenue expansion.
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Lovelock further elaborates that most of the growth in GenAI spending this year and next year is in the tech sector. All the big-tech companies are building the AI infrastructure needed for GenAI, whereas software companies are spending to incorporate GenAI in their products and services. The biggest area of growth next year, however, is data centers, projected to grow over 15%. When asked if this is a slowdown from the previous year’s 35% growth, he remarked that the denominator is getting “awfully big”.
Enterprises, banks, governments, retailers, and everyone else are building up or buying AI-optimized servers. However, the biggest purchasers are still the hyperscalers. The massive amount of money they are going to be spending will surpass all of the money Big Tech companies have previously spent on CPU servers from 2000 to 2026. While the net increase continues, the sheer spending of the hyperscalers is keeping the growth rate down, Lovelock notes.
New estimates from Morgan Stanley reinstate the same, with four of the Big Tech companies expected to invest about $300 billion in capital expenditures next year, and 2026 is expected to be even bigger. The bank notes that much of the CapEx is focused on hyperscalers. These hyperscalers, with their extensive cloud networks, are in a significant multi-year investment cycle driven by the pursuit of opportunities in generative AI and large language models.
“These high and rising CapEx numbers again speak to the importance of continued disclosure about new/incremental adoption, engagement, and revenue opportunities each of the four companies are seeing and investing in”.
-Bank’s analysts said.
The Latest Developments in AI
In recent AI news, we’ve seen prominent announcements from companies unveiling breakthroughs in large language models, AI hardware, and partnerships that aim to incorporate AI more deeply into core business functions. On November 5, CNBC reported that Perplexity AI, the artificial intelligence startup, is in the final stages of raising $500 million in funding at a $9 billion valuation. The company has been gaining significant investor attention due to the generative AI boom.
In other news, You.com and TollBit’s have created a partnership for the first-of-its-kind AI agent. “Election Agent” will be able to access accurate, authoritative results and race calls from Decision Desk HQ — the election data provider that was the first to call the presidential elections of 2016 and 2020. Americans will be able to access the same election results, race calls, and data that are provided by major news organizations but through an accessible AI chat interface.
“There’s a big unsolved need in the AI industry: scalably connecting AI companies directly with authoritative data sources. With the first presidential election in the AI era, concerns about misinformation are at the forefront. Much of today’s data isn’t readily accessible. Through our platform, Decision Desk HQ made its real-time election APIs available to AI companies at scale. This partnership with You.com, which has set the standard for grounded, accurate AI responses, demonstrates that AI can deliver real-time information responsibly when connected to authoritative sources. That’s ultimately what builds trust in AI – giving it direct access to ground truth data”.
– Toshit Panigrahi, co-founder CEO of TollBit.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
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).
A technician working at a magnified microscope, developing a new integrated circuit.
Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) is an American technology company engaged in the design, development, and supply of semiconductor and infrastructure software solutions. It is one of the leading players designing chips for companies that are building AI data centers.
On November 5, Broadcom Inc. (NASDAQ:AVGO) announced new updates to its VMware Cloud Foundation (VCF), the company’s flagship enterprise-class private cloud platform that helps organizations with their digital transformation efforts. The VCF is not only simple to deploy, but also easy to consume, and comes with lower cost and risk. The company will be revealing an expanded set of VMware Cloud Foundation (VCF) Advanced Services innovations, ecosystem partnerships, and modernization programs at the VMware Explore 2024 event in Barcelona, thereby helping businesses accelerate generative AI application development, cybersecurity initiatives, and sovereign cloud adoption.
“Broadcom is enabling the private cloud everywhere with VMware Cloud Foundation. Through a private cloud platform and portfolio of Advanced Services that are ubiquitous, flexible, and secure, we are unlocking the promise of AI in the enterprise, delivering new levels of organizational resilience, and supporting the privacy and digital sovereignty demands of customers around the world.”
– Krish Prasad, senior vice president and general manager, VCF Division at Broadcom.
Overall AVGO ranks 5th on our list of the AI stocks you shouldn’t miss. While we acknowledge the potential of AVGO as an investment, our conviction lies in the belief that some 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.
