We recently published a list of 12 Best QQQ Stocks to Invest in Now. In this article, we are going to take a look at where Broadcom Inc. (NASDAQ:AVGO) stands against other best QQQ stocks to invest in now.
Lunch’ to analyze the market’s reaction to the tariff announcements. McCartney referred to the situation as tariff policy ping pong, and highlighted how it adds to the uncertainty in Washington during a time when weak data is emerging from other areas. She explained that this has created a perfect storm of challenges, which includes seasonal pressures that make this time of year difficult. Retail buyers have stepped away from the market, and there is uncertainty for individuals regarding tax policy and for corporations concerning tariffs and taxes. The withdrawal of overleveraged bids has contributed to increased market volatility, which makes it harder for major tech companies to maintain their leadership roles.
The conversation then turned to the influence of key sectors, particularly the MAG7. McCartney noted that when these sectors underperform, they can generate downside pressure on the market, which contrasts with the desire for a broader market trade. She pointed out that while these tech stocks are down year-to-date, the overall market remains materially up and is annualizing at a high single-digit rate. She expressed optimism about market breadth and suggested that this could present a buying opportunity for investors to re-enter big tech.
Tech stocks face short-term volatility due to market uncertainty, but their long-term potential remains intact.
Methodology
We sifted through the Invesco QQQ exchange-traded fund (ETF) holdings to find 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 Fund Holders: 161
Broadcom Inc. (NASDAQ:AVGO) is a global technology leader that designs and develops semiconductor and infrastructure software solutions. Operating through its Semiconductor Solutions and Infrastructure Software segments, it provides products like networking components, connectivity solutions, and software infrastructure.
On March 7, Piper Sandler maintained an Overweight rating for the company with a $250 price target due to its AI-driven performance and networking growth. The company exceeded January quarter estimates and provided strong April quarter projections. Revenue from XPU and AI-related networking reached $4.1 billion in the FQ1 2025, which marked a 77% year-over-year increase. It is projected to be $4.4 billion in the April quarter, which represents a 44% rise.
This growth is driven by shipments of networking solutions to hyperscale customers who are investing in next-generation AI models. Broadcom Inc. (NASDAQ:AVGO) anticipates a serviceable addressable market (SAM) of $60 to $90 billion from its three primary hyperscale customers by FY27. Four additional hyperscale customers are now collaborating with Broadcom Inc. (NASDAQ:AVGO) to develop custom AI accelerators.
Broadcom Inc. (NASDAQ:AVGO) has exceeded expectations, solidified its AI leadership, and projected substantial growth in the AI market. This has led to a trillion-dollar market capitalization. Columbia Threadneedle Global Technology Growth Strategy stated the following 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 7th on our list of best QQQ stocks to invest in now. While we acknowledge the growth potential of AVGO, our conviction lies in the belief that AI stocks hold great promise for delivering high 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.