We recently compiled a list of the 10 AI News That Broke The Internet. In this article, we are going to take a look at where Broadcom Inc. (NASDAQ:AVGO) stands against the other AI stocks.
Should original content contributors be paid every time large language models use their work? OpenAI CEO Sam Altman believes they should, much like Name, Image, and Likeness (NIL) deals for college athletes, he said on Wednesday at the New York Times’ DealBook Summit.
“I think we do need a new [standard] for how creators are going to get rewarded. We need to find new economic models where creators can have new revenue streams”.
-Sam Altman
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Even though developing such an economic model will be complex, it is unclear how people getting paid for their original work could become a norm in the future even if it does. The news comes amidst ChatGPT, Altman’s AI chatbot, which has itself been under fire numerous times over the years over copyright infringement and unpermitted use of published articles.
“A particular passion of mine has always been, can we figure out how to do micropayments where, if you generate a story in the style of [a writer, they] can opt into that … and get paid for it.”
-Altman.
Regardless of Altman’s company facing criticism over copyright infringement concerns and ethical debates surrounding its AI models, the company continues to push boundaries in AI innovation, introducing groundbreaking tools and features that redefine the tech landscape. In its latest, OpenAI has introduced its buzzy AI video-generation tool, Sora, on Monday, December 9th.
Working similar to OpenAI’s image-generation AI tool, DALL-E, Sora will be able to develop a high-definition video clip each time a user types out a desired scene. The video generation tool will also be able to generate video clips inspired by still images and extend existing videos or fill in missing frames. As per OpenAI’s YouTube live stream, the tool will debut to U.S. users as well as to “most countries internationally” on Monday, December 9th. However, it also said that there is “no timeline” yet for launching the tool in Europe and the U.K., as well as some other countries.
In October, the company closed its latest funding round with a valuation of $157 billion, securing $6.6 billion from a wide range of investment firms and major tech companies. All of the company’s strategic initiatives and funding are part of a thoughtful growth plan for OpenAI as the company competes with other strong AI startups such as Anthropic, Elon Musk’s xAI, and other tech giants.
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: 128
Broadcom Inc. (NASDAQ:AVGO), a technology company, offers custom chip offerings and networking assets that has helped it establish a strong position in the AI space. On December 9, JP Morgan analyst Harlan Sur maintained an Overweight rating on Broadcom Inc (NASDAQ:AVGO) with a price target of $210. With the technology company set to report its earnings on Thursday, the firm remains bullish on the stock on the back of a strong demand profile for AI products, continued cyclical recovery in its diversified semiconductor (ex-AI) end markets, and unlocked VMWare revenue synergy.
Sur affirmed that software renewals from major corporate customers will lead to strong growth in the VMWare business, a cloud computing technology company that Broadcom acquired in November 2023. Overall, the analyst projects revenue and EPS upside for the full year, continued strong demand for AI products, and a coordinated end market recovery in its diversified semiconductor (ex-AI) end markets for fiscal year 2025. With a $30 billion pipeline of AI revenue opportunities per AI customer over the next 4-5 years, and strong VMWare momentum, Sur projects strong dividend growth and sustained AI leadership for the company.
“Broadcom is set to report October quarter (F4Q24) earnings Thursday, and we continued to see a strong demand profile for its AI products combined with continued cyclical recovery in its diversified semiconductor (ex-AI) end markets (e.g., enterprise, server/storage) and VMWare revenue synergy unlock.”
Overall, AVGO ranks 1st on our list of AI news that broke the internet. 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 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.