Harvard University Stock Portfolio: Top 10 Stock Picks

7. Broadcom Inc. (NASDAQ:AVGO)

Harvard Management Company’s Stake: $89.6 million

Broadcom Inc. (NASDAQ:AVGO) ranks among the world’s largest technology companies, with operations spanning the hardware and software sectors. The company’s primary strength is in hardware, as it supplies networking and custom chips across diverse applications.

In its third quarter, Broadcom Inc. (NASDAQ:AVGO) reported $13.1 billion in revenue, a 47% year-over-year increase driven by strong AI revenue, VMware bookings, and robust non-AI semiconductor sales. Looking ahead to Q4 2024, Broadcom Inc. (NASDAQ:AVGO) expects AI revenue to grow 10% sequentially, reaching $3.5 billion, which would bring the annual AI revenue to $12 billion, largely fueled by ethernet networking and custom AI accelerators for data centers.

On November 6, Bank of America reiterated a Buy rating on Broadcom Inc. (NASDAQ:AVGO), projecting strong AI revenue growth with a CAGR of 30-35% in the coming years due to the company’s leadership in AI computing and networking and its strong free cash flow. However, BofA adjusted its fiscal 2025 earnings forecast for the company, citing “seasonal headwinds” linked to a product transition for Google’s Tensor Processing Unit (TPU), which may impact early-year revenue. This effect is expected to be offset by new AI and networking contracts, along with increased content opportunities with Apple, potentially leading to an adjusted EPS of $7.31 by 2026.