Baron Funds, an investment management firm, released its “Baron Durable Advantage Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund advanced 10.9% (Institutional Shares) in the first quarter compared to a 10.6% return for the Fund’s benchmark, the S&P 500 Index. The strong US economy led the fund’s quarterly gains. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Baron Durable Advantage Fund highlighted stocks like Broadcom Inc. (NASDAQ:AVGO) in the first quarter 2024 investor letter. Broadcom Inc. (NASDAQ:AVGO) designs and develops various semiconductor devices. Broadcom Inc. (NASDAQ:AVGO) one-month return was 1.39%, and its shares gained 65.59% of their value over the last 52 weeks. On May 31, 2024, Broadcom Inc. (NASDAQ:AVGO) stock closed at $1,330.62 per share with a market capitalization of $616.637 billion.
Baron Durable Advantage Fund stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its first quarter 2024 investor letter:
“We also initiated a new position in Broadcom Inc. (NASDAQ:AVGO), a global technology leader that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions. Its semiconductor solutions focus on complex digital, mixed signal, and analog products across a variety of end-markets while its software products help customers plan, develop, automate, manage, and secure applications across various platforms.
Historically, Broadcom’s semiconductor business has been a market-leading franchise with high margins and market-level growth, but the emergence of AI-related demand has spurred stronger growth across its portfolio, specifically in its Networking business unit. Broadcom’s AI-related revenue has grown from less than 5% of its semiconductor business to an expected 35% in its fiscal 2024 as its industry-leading Ethernet switch silicon business and, more importantly its custom silicon solutions, primarily the TPU for Google but with two additional customers ramping as well, have grown significantly. While custom chips tend to be less versatile and flexible than GPUs, their adoption makes sense if customers have large scale workloads with algorithms that are relatively stable, as they allow hyperscale customers to save costs on both upfront capex as well as on energy consumption. Over time, we believe that custom silicon solutions will obtain a noticeable market share of internal AI workloads, with Broadcom as the main beneficiary given its 10-year history of working with its customers, leading to a higher proportion of sales related to AI and an above-market growth in the company’s semiconductor solutions business…” (Click here to read the full text)
A technician working at a magnified microscope, developing a new integrated circuit.
Broadcom Inc. (NASDAQ:AVGO) is in 30th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 115 hedge fund portfolios held Broadcom Inc. (NASDAQ:AVGO) at the end of the first quarter which was 91 in the previous quarter.
In another article, we discussed Broadcom Inc. (NASDAQ:AVGO) and shared the list of buzzing AI semiconductor stocks in 2024. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.
If you are looking for an AI stock that is as promising as Microsoft 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.
