Jim Cramer on Tesla and Other Stocks

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1. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 130

Cramer expressed enthusiasm about Broadcom Inc. (NASDAQ:AVGO) and said, “Buy. Charitable Trust name, doing incredibly well… I like Broadcom, I like Hock Tan.”

Broadcom (NASDAQ:AVGO) specializes in the design, development, and supply of semiconductor devices, building on a strong foundation in semiconductor innovation. In the third quarter, the company reported total revenue of $13.1 billion, marking a significant increase of 47% from the same period last year. A contributor to this growth has been the surge in demand for artificial intelligence products and services, which brought in $3.1 billion during the quarter.

Broadcom (NASDAQ:AVGO) expects that AI will become a key driver of growth moving forward, projecting $3.5 billion in AI revenue for the upcoming fourth quarter. The company has found considerable success in providing custom AI accelerators, specialized chips designed to handle AI workloads, to major hyperscale customers such as Microsoft, Amazon, and Alphabet. In the third quarter, sales of these AI accelerators skyrocketed, increasing by three and a half times compared to the previous year.

On October 14, Mizuho raised the price target on the stock to $220 from $190 and maintained an Outperform rating. The firm forecasts tailwinds in artificial intelligence, custom silicon, and networking through 2025 and 2026.

While we acknowledge the potential of Broadcom Inc. (NASDAQ: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.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

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