We recently compiled a list of the 10 Best Stocks for Beginners with Little Money According to Hedge Funds. In this article, we are going to take a look at where Broadcom Inc. (NASDAQ:AVGO) stands against the other beginner-friendly stocks.
Headlines from the US Stock Market
Uncertainty sweeps across the US with the incoming administration’s potential policies. Simultaneously, the Federal Reserve has decided to pause its rate-cutting cycle and the decision to resume easing is doubtful amidst Trump’s trade policies which are being deemed inflationary. Tariffs on foreign imports are considered a risk of reviving inflation. According to Reuters, Dustin Reid, chief strategist of fixed income at Mackenzie Investments in Toronto, reiterated the uncertainty looming as follows:
“Everything that is going on right now, from economic data to markets news and tariffs, adds up to a lot more uncertainty across all markets”
Recently, technology stocks benefitting from the business potential of AI witnessed a deep shock as Chinese startup DeepSeek revealed a large language model that can compete with American AI giants but at a fraction of the cost of OpenAI’s, Google’s, or Meta’s popular AI models. DeepSeek unveiled a free, open-source large language model that it claims took only two months and less than $6 to build.
The event raised a lot of concerns over America’s leadership in the AI sector and how big tech giants are investing heavily in AI models and data centers while DeepSeek somehow developed a highly competitive model without having as much compute as U.S. hyperscalers, as pointed out by Srini Pajjuri, semiconductor analyst at Raymond James. While the US has been trying to limit China’s access to the chips powering advanced AI systems, the news about DeepSeek’s chatbot making it to most-downloaded free app in the US on Apple’s App Store demonstrates the country’s rapid gains in the sector.
Our Methodology:
In order to compile a list of the 10 best stocks for beginners with little money according to hedge funds, we used a consensus of similar rankings as well as blue-chip ETFs. Moving on, we shortlisted the top 10 stocks from our list which had the highest number of hedge fund holders. The 10 best stocks for beginners with little money according to hedge funds have been arranged in ascending order of their hedge fund holders as of Q3.
At Insider Monkey we are obsessed with 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) designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions. The firm’s category-leading product portfolio caters to markets such as cloud, broadband, data center, storage, industrial, networking, wireless, and enterprise software. Broadcom is headquartered in Palo Alto, California.
The global infrastructure technology leader, Broadcom, is built on over 60 years of innovation, engineering excellence, and collaboration. Many of the largest companies including most of the Fortune 500 as well as government agencies rely on the firm’s software solutions to help manage and secure their on-premises and hybrid cloud environments, AI data centers, and private cloud infrastructure. Simultaneously, Broadcom differentiates itself through its high-performance design and integration capabilities and develops semiconductor products for target markets where it can earn attractive margins.
Financials remain robust for Broadcom as its fiscal year 2024 revenue climbed 44% year-over-year to a record $51.6 billion. While Semiconductor revenue was at a record $30.1 billion supported by AI revenue of $12.2 billion, infrastructure software revenue grew to $21.5 billion as a result of the integration of VMware. Based on its technology leadership, leading semiconductor and infrastructure software solutions, and an extensive portfolio of innovative and differentiated products, Broadcom Inc. (NASDAQ:AVGO) is in an attractive spot for the future.
Overall AVGO ranks 8th on our list of the best stocks for beginners with little money according to hedge funds. While we acknowledge the potential of AVGO as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued 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.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
