Parnassus Investments, an investment management company, released the “Parnassus Value Equity Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the Fund (Investor Shares) returned -3.81% (net of fees) underperforming the Russell 1000 Value Index’s -2.17% return. Stock selection in the Health Care sector drove most of the portfolio’s underperformance. The firm believes the Fund is well positioned for future returns with AI-related investments in Information Technology complemented by holdings that should benefit from improved performance across other sectors. If investor uncertainty increases, it anticipates finding more bargain opportunities. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Parnassus Value Equity Fund highlighted stocks like Broadcom Inc. (NASDAQ:AVGO) in the second quarter 2024 investor letter. Broadcom Inc. (NASDAQ:AVGO) designs and develops various semiconductor and infrastructure software solutions. The one-month return of Broadcom Inc. (NASDAQ:AVGO) was 11.85%, and its shares gained 110.96% of their value over the last 52 weeks. On September 25, 2024, Broadcom Inc. (NASDAQ:AVGO) stock closed at $175.52 per share with a market capitalization of $819.78 billion.
Parnassus Value Equity Fund stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q2 2024 investor letter:
“During the second quarter, the Fund’s overweight position in the Information Technology sector decreased slightly as we sold our position in Cisco Systems and used most of the proceeds to buy Broadcom Inc. (NASDAQ:AVGO), a leading semiconductor company and provider of custom silicon products. Both stocks provide similar exposure to networking technology, but we believe Broadcom offers more upside from AI infrastructure spend and defensiveness due to its software assets.
Broadcom, a leader in semiconductor and infrastructure software, offers promising AI upside via data center ethernet and custom ASICs and can benefit if the iPhone’s new AI features gain traction this year. Additionally, the strength of its enterprise software assets in VMware, Symantec and CA Technologies could provide defensiveness if enterprise IT spending continues to be muted.”
A technician working at a magnified microscope, developing a new integrated circuit.
Broadcom Inc. (NASDAQ:AVGO) is in 15th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 130 hedge fund portfolios held Broadcom Inc. (NASDAQ:AVGO) at the end of the second quarter which was 115 in the previous quarter. In the fiscal Q3 2024, Broadcom Inc. (NASDAQ:AVGO) reported consolidated net revenue of $13.1 billion, up 47% year-on-year. 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Broadcom Inc. (NASDAQ:AVGO) and shared the list of best NASDAQ stocks to invest in right. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.