UBS’ Top Tech Based Disruptive Stocks For 2030: Top 29 Stocks

6. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders In Q2 2024: 130

Broadcom Inc. (NASDAQ:AVGO) is a diversified technology company that is one of the leading players in the global semiconductor industry. The firm designs and sells a variety of semiconductor products that are used in networking and other applications. It also has a strong application specific integrated circuit (ASIC) division which enables businesses to access customized chips for data centers and other workloads. Broadcom Inc. (NASDAQ:AVGO) has also managed to diversify its business division by growing cybersecurity software products. Its VMWare acquisition enabled the firm to grow software revenue by a whopping 300% in its fiscal Q3 to add high margin and recurring revenue into its business. Broadcom Inc. (NASDAQ:AVGO) stands to benefit from the growing AI industry as its ASIC division can enable businesses to develop chips and reduce reliance on NVIDIA’s products.

Baron Funds mentioned Broadcom Inc. (NASDAQ:AVGO) in its Q2 2024 investor letter. Here is what the fund said:

“Broadcom Inc. is a global technology leader that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions. The stock rose during the quarter as it reported strong earnings on the back of its two key growth drivers, AI semiconductors and its acquired VMware software business. The company once again increased its outlook for AI-related revenue, now expecting $11 billion or more this year (versus prior guidance for $10 billion), on the back of strength in both hyperscale custom compute and networking chips, where Broadcom maintains dominating share. In networking, Broadcom’s solutions are critical to enabling AI training factories to scale towards 100,000 chip clusters in the near term and 1 million chip clusters over the coming years. In AI custom compute, Broadcom designs custom accelerators for large consumer- internet AI companies (such as Google and Meta), who are building increasingly large AI clusters to drive improvements in user engagement and targeted advertising on their consumer media platforms. VMware remains on track to continue rapid sequential growth while simultaneously reducing operating expenses, driving faster-than-expected margin expansion and accretion, as management has simplified the product offering and is converting customers from a license model to subscriptions. We believe VMware will grow beyond the $4 billion near-term quarterly target, well above current analyst expectations. These two factors combined have caused a re-rating to the growth profile for the overall company. To quote CEO Hock Tan, “there is only one Broadcom. Period.”