We recently compiled a list of the 10 S&P 500 Stocks on Jim Cramer’s Radar. In this article, we are going to take a look at where Broadcom Inc. (NASDAQ:AVGO) stands against the other S&P 500 stocks.
Jim Cramer, host of Mad Money, recently discussed the current state of the market and also discussed both the leading and lagging stocks within the S&P 500. He posed an intriguing question: What if Trump’s tariffs are more negotiable than expected? Instead of a hard-line approach, Cramer suggested they could end up being more like a “steak knife” than a “meat axe,” meaning less harmful to trade and international relations.
READ ALSO Jim Cramer Discussed These 10 NASDAQ 100 Stocks Recently and 8 Stocks on Jim Cramer’s Radar
While a more reasonable tariff policy might not be ideal for global trade, it would be a positive development for stocks, particularly if it results in lower prices for American consumers or if multinational companies move their manufacturing to more favorable countries. Cramer emphasized that, for stockholders looking for growth, hopes should be placed on negotiable tariffs.
“If you own stocks and you want them higher, you have to hope for negotiable tariffs that could cause countries to lower prices to us or make multinational companies move their manufacturing base here to a more friendly country.”
Cramer also discussed the S&P 500’s performance this year, noting that, while it is clear which stocks have thrived in the Nasdaq, the winners and losers in the broader S&P 500 have been more difficult to pinpoint.
Additionally, Cramer mentioned that several of the stocks in his Charitable Trust, which are reliant on a rebound in China, are ones he’s not excited about at the moment, especially considering the disappointing Chinese economic data. He mentioned that his dismay for such stocks will only last until “they annualize the crummy Chinese numbers and then they’ll probably bounce back.”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 2. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter, which was taken from Insider Monkey’s database of 900 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
Cramer praised Broadcom Inc.’s (NASDAQ:AVGO) CEO and highlighted that he has delivered on his promises.
“Number seven was generally obvious in true Nasdaq style. I’m talking about Broadcom, symbol AVGO, up 108%. Now we had CEO Hock Tan on the show when we were in San Francisco not that long ago, and he laid out a vision where his company would be making a killing from the data center. It’s very rare that you have a totally bankable exec come on your show telling you exactly what will happen and then that executive delivers 100%. He’s greeted with disbelief, a giant upside surprise, and a gigantic move higher. He said it all. Plus, I think Broadcom’s in inning one of this turn. It’s not too late to get on board. This one, we have a nice slug for the Charitable Trust.”
Broadcom (NASDAQ:AVGO) is a prominent company in semiconductor design, development, and supply, known for creating custom chips for major cloud companies like Google. It also manufactures essential networking equipment to link thousands of AI chips in server clusters. One of its noteworthy products is its accelerator chips, called XPUs, which play an important role in the AI ecosystem.
CEO Hock Tan provided a significant revenue forecast for the company over the next two years, forecasting a shift in the AI-chip industry that could benefit companies developing custom silicon chips like XPUs, rather than relying on general-purpose GPUs made by competitors such as Nvidia. Tan sees considerable growth potential in Broadcom’s AI and AI networking sectors, with revenue projections for 2027 ranging between $60 billion and $90 billion, a significant increase from last year’s estimate of $15 billion to $20 billion.
Tan attributed Broadcom’s (NASDAQ:AVGO) growth to its custom XPUs and AI networking solutions, noting the rising adoption of these chips by key clients, especially Google. The company has doubled its XPU shipments to three hyperscale customers, and by 2027, these clients are expected to deploy 1 million XPU clusters, which Tan believes will drive significant growth for the company.
Overall AVGO ranks 4th on our list of the S&P 500 stocks on Jim Cramer’s radar. While we acknowledge the potential of AVGO as an investment, our conviction lies in the belief that 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.
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Disclosure: None. This article is originally published at Insider Monkey.
