Top 10 Stocks Everyone is Talking About

3. Broadcom Inc (NASDAQ:AVGO)

Number of Hedge Funds Investors: 128

Steven Dickens from HyperFRAME Research explained in a latest program on Schwab Network why he is bullish on Broadcom Inc (NASDAQ:AVGO).

“We’re starting to see some of the macro trends play out here. Obviously, the VIX is up, there’s a lot of volatility, and people are worried about some of the tariffs and some of the posture. But I think what I track from a Broadcom perspective is: are they exposed to the right markets, have they got that product innovation cycle rolling, and are they executing? I think on all three of those, I give them a 10 out of 10. This company’s firing on all cylinders. Hock Tan is certainly starting to step up to be one of what I describe as the mag 8, we are gonna see this company continue to grow.”

Broadcom threw it out of the park with its latest quarterly results. The most important part of the report? The company expects strong AI semiconductor sales growth to continue. It sees AI semiconductor revenue of about $4.4 billion in fiscal Q2, which would be a 42% year-over-year growth.  Broadcom reported $6 billion in free cash flow for the quarter. Its software business gross margin came in at about 90%. But what’s Broadcom’s moat? It makes ASIC, chips designed for specific applications and tasks. As major companies look for custom chips to break Nvidia monopoly and lower costs, Broadcom is positioned well to thrive. Many top AI spenders are teaming up with Broadcom to develop these chips, which are expected to be high-margin, high-volume products, potentially driving substantial growth in both revenue and profits.

Broadcom Inc (NASDAQ:AVGO) continues to be a leader in the AI ASCI and networking chips market. Broadcom Inc (NASDAQ:AVGO) has 3nm AI ASIC chip deals with Alphabet and Meta in addition to many other tech giants aiming massive spending for AI hyperscaling.

Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q4 2024 investor letter:

“Broadcom Inc. (NASDAQ:AVGO) soared after the company reported quarterly results in December that defied expectations and further solidified the company’s already compelling AI narrative. The technology infrastructure powerhouse with leading positions across wireless, data center networking, AI semiconductors and infrastructure software reported strong results, including the usual prodigious cash flow generation, resulting in a double-digit increase to its dividend. More importantly, investors cheered the increased clarity concerning the company’s AI market opportunity, now estimated at $60 to $90 billion by 2027, up from $15 to $20 billion in 2024. This sizable uptick — and increased confidence provided by the management team about the AI opportunity — drove a re-rating in the stock and the company’s market cap eclipsed $1 trillion in value.”