We recently compiled a list of the Top 10 AI Stocks on Latest Analyst Ratings and News. In this article, we are going to take a look at where Broadcom Inc. (NASDAQ:AVGO) stands against the other AI stocks.
As President Joe Biden nears the end of his term, he is issuing a series of executive orders. In the latest, the President has signed an order to provide federal support to address the massive energy needs of fast-growing advanced artificial intelligence data centers.
READ NOW: Top 10 AI Stocks on Wall Street’s Radar and 15 Important AI News and Ratings on Investors’ Radar
The order will allow federal land owned by the Defense and Energy departments to host gigawatt-scale AI data centers and new clean power facilities. According to Biden, the order will “accelerate the speed at which we build the next generation of AI infrastructure here in America, in a way that enhances economic competitiveness, national security, AI safety, and clean energy”.
According to the order, companies tapping federal land for AI data centers must also purchase an “appropriate share” of American-made semiconductors. These purchases will be decided on a case-by-case basis.
“It’s really vital that we ensure that the AI industry can build out the infrastructure for training and using powerful AI models here in the United States”.
-White House technology adviser Tarun Chhabra.
Several known names, including OpenAI Senior Vice President of Global Affairs Chris Lehane, have commended this effort. Lehane also called out for cultivating a robust domestic infrastructure for the growing U.S. artificial intelligence sector.
“So what you get with the Biden administration today is — at least from a signaling perspective — on federal land, trying to short the timeline between when you can get your project shovels in the ground and then the project going forward”.
-Chris Lehane
According to Lehane, the incoming Trump administration sees AI through two lenses — national security and economic security. He hopes that both sides of the coin will amalgamate into a national strategy.
AI Company OpenAI has also recently laid out its vision for artificial intelligence development in the U.S. According to the company, the US needs investment from abroad and supportive regulation to stay ahead of China in the race for nascent technology. In a 15-page document called the “Economic Blueprint”, it said that “Chips, data, and energy are the keys to winning AI” and that the U.S. needs to act now to craft nationwide rules that can help secure its advantage.
OpenAI released the document days before President-elect Donald Trump takes office, with CEO Sam Altman also previously donating around $1 million to Trump’s inaugural fund in hopes of fostering a positive relationship.
“There’s an estimated $175 billion sitting in global funds awaiting investment in AI projects, and if the U.S. doesn’t attract those funds, they will flow to China-backed projects —strengthening the Chinese Communist Party’s global influence”.
-OpenAI said in the document.
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) is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets. On January 13, Jefferies named Broadcom as a top pick, saying that the semis company is a top idea in 2025. The firm raised its price target on the stock to $300 from $225 based on its strong and growing customer base. Broadcom has a rapidly growing AI chip market, driven by demand for custom-designed chips, or ASICs. Its advanced chips are anticipated to rival Nvidia’s in compute density as new technologies like 3.5D packaging and silicon photonics gain traction. The firm further revealed that Broadcom’s AI chip sales could generate over $60 billion in revenue by 2027. This could drive earnings per share to $12 or more. Its AI business has also gained momentum, specifically in training-focused chips, which need higher prices as designs become more complex. As these chips become larger and incorporate more advanced technologies, it will drive the average selling prices higher.
“AVGO Top Pick but Plenty of Growth to Go Around.”
Overall AVGO ranks 1st on our list of the top AI stocks on analyst ratings and news. 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.
READ NEXT: 20 Best AI Stock To Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
