Top AI Stocks to Buy and Hold
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy AVGO?
Source: Fool
- Broadcom's Growth Potential: Broadcom (AVGO) is poised for significant growth over the next three years, capitalizing on the data center boom and the demand for application-specific integrated circuits (ASICs), with a market cap projected to reach $1.6 trillion due to increased AI infrastructure spending from Alphabet.
- Alphabet's AI Advantage: Alphabet (GOOGL) has accelerated its Google Search revenue with new AI features, and its cloud computing unit saw a 48% revenue surge last quarter, with the deployment of TPUs expected to drive further revenue growth, as Morgan Stanley estimates $13 billion generated for every 500,000 TPUs deployed.
- Micron Technology's Market Demand: Micron Technology (MU), one of the three major DRAM manufacturers, is experiencing a surge in sales and gross margins due to the memory bottleneck in AI infrastructure, with high bandwidth memory (HBM) demand expected to keep the DRAM market tight for the next few years.
- Market Selection Strategy: In the current stock picker’s market, active investors can achieve market-beating returns by strategically investing in high-growth AI stocks like Broadcom, Alphabet, and Micron, leveraging the investment opportunities presented by advancements in AI technology.
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Analyst Views on AVGO
Wall Street analysts forecast AVGO stock price to rise
28 Analyst Rating
27 Buy
1 Hold
0 Sell
Strong Buy
Current: 331.170
Low
390.00
Averages
462.58
High
525.00
Current: 331.170
Low
390.00
Averages
462.58
High
525.00
About AVGO
Broadcom Inc. is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software and security solutions. The Company operates through two segments: semiconductor solutions and infrastructure software. Its semiconductor solutions segment includes all of its product lines and intellectual property (IP) licensing. It provides a variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications. Its infrastructure software segment includes its private and hybrid cloud, application development and delivery, software-defined edge, application networking and security, mainframe, distributed and cybersecurity solutions, and its FC SAN business. It provides a portfolio of software solutions that enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Investment Opportunities in AI Infrastructure Market
- Broadcom's Market Position: Broadcom (NASDAQ: AVGO) stands out in the AI infrastructure market, leveraging its Tomahawk Ethernet switch to lead in data center networking, which is expected to benefit from the growth of AI chip clusters, driving long-term growth.
- Custom Chip Collaborations: Broadcom's partnership with Alphabet to develop tensor processing units (TPUs) has secured a $21 billion order, showcasing its strong capabilities in custom AI chip development and further solidifying its market leadership.
- TSMC's Industry Advantage: Taiwan Semiconductor Manufacturing (NYSE: TSM) is the world's leading chip manufacturer with a near monopoly, working closely with clients to boost capacity and meet surging AI and GPU demand, enhancing its long-term profitability.
- Price Increase Strategy: TSMC has informed customers of a four-year price hike schedule, and combined with capacity expansion, this is expected to further increase its gross margins, reinforcing its competitive edge in the AI infrastructure market.
See More
Top AI Stocks to Buy and Hold
- Broadcom's Growth Potential: Broadcom (AVGO) is poised for significant growth over the next three years, capitalizing on the data center boom and the demand for application-specific integrated circuits (ASICs), with a market cap projected to reach $1.6 trillion due to increased AI infrastructure spending from Alphabet.
- Alphabet's AI Advantage: Alphabet (GOOGL) has accelerated its Google Search revenue with new AI features, and its cloud computing unit saw a 48% revenue surge last quarter, with the deployment of TPUs expected to drive further revenue growth, as Morgan Stanley estimates $13 billion generated for every 500,000 TPUs deployed.
- Micron Technology's Market Demand: Micron Technology (MU), one of the three major DRAM manufacturers, is experiencing a surge in sales and gross margins due to the memory bottleneck in AI infrastructure, with high bandwidth memory (HBM) demand expected to keep the DRAM market tight for the next few years.
- Market Selection Strategy: In the current stock picker’s market, active investors can achieve market-beating returns by strategically investing in high-growth AI stocks like Broadcom, Alphabet, and Micron, leveraging the investment opportunities presented by advancements in AI technology.
See More
Wall Street Analysts Adjust Ratings
- Analyst Rating Changes: Top Wall Street analysts have adjusted their ratings on several companies, including upgrades, downgrades, and initiations, reflecting varying market perspectives on these firms.
- Market Focus: Analysts' views on TSM stock have garnered investor attention, indicating ongoing interest and potential investment opportunities within the semiconductor sector.
- Impact of Rating Changes: These rating adjustments may influence investor decisions, particularly in the current economic climate where analysts' opinions are considered vital market signals.
- Source of Information: A complete overview of analyst rating changes can be found on Benzinga's analyst ratings page, providing a comprehensive market perspective and data support.
See More
AI Infrastructure Market Continues to Boom with Key Investment Opportunities
- Broadcom's Market Leadership: Broadcom (AVGO) is a leader in data center networking, with its Tomahawk Ethernet switch being a key solution in AI data centers, expected to benefit from rapid expansion in AI infrastructure, driving growth over the next decade.
- Demand for Custom AI Chips: The $21 billion order for tensor processing units (TPUs) developed in partnership with Alphabet highlights Broadcom's strong demand in the custom AI chip market, further solidifying its critical role in AI infrastructure.
- TSMC's Industry Advantage: Taiwan Semiconductor Manufacturing (TSM) holds a near-monopoly as the world's leading chip manufacturer, poised to benefit significantly from the growing demand for both GPUs and AI ASICs as AI infrastructure builds out.
- Price Increases and Margin Growth: TSMC has informed customers of a four-year price hike schedule, and combined with its capacity expansion strategy, this is expected to enhance its gross margin of 59.02%, ensuring long-term competitiveness in the AI infrastructure sector.
See More
AI Drives Exponential Growth in Capital Expenditure
- Surge in Capital Expenditure: Top hyperscalers are expected to increase capital expenditures by 70% this year, with Amazon, Alphabet, Meta, and Microsoft planning a combined spending of over $600 billion, indicating a strong commitment to AI infrastructure investment.
- Mixed Market Reactions: Despite the significant increase in capital spending, Amazon and Microsoft's shares have dropped 12% and 16% respectively, while Alphabet's stock is down less than 1% and Meta's has risen by 1%, reflecting investor concerns about the timing of returns on these investments.
- Infrastructure Investment Opportunities: With spending accelerating, investors are drawn to
See More
Bullish Outlook for AI Stocks Amid Spending Surge
- Surge in Capital Expenditures: Amazon plans to spend $200 billion in 2026, with Alphabet and Meta at $185 billion and $135 billion respectively, totaling over $500 billion, indicating that AI infrastructure development is accelerating despite market skepticism about AI spending.
- Opportunities for Nvidia and Broadcom: As major computing unit suppliers, Nvidia and Broadcom are expected to benefit from this massive spending, with analysts projecting a 52% revenue growth for both companies this fiscal year, highlighting that the AI boom is far from over.
- Market Reaction Misalignment: Despite the decline in Nvidia and Broadcom's stock prices due to market sentiment, investors should seize the current undervalued buying opportunity, especially as Nvidia's P/E ratio stands at 24 times, significantly lower than Broadcom's 32 times.
- Technological Collaboration Driving Growth: The soaring demand for Broadcom's TPU chips, developed in collaboration with Alphabet, is expected to further boost Broadcom's sales, reflecting the increasing need for custom chips among AI hyperscalers.
See More
Investment Opportunities in AI Infrastructure Market
- Broadcom's Market Position: Broadcom (NASDAQ: AVGO) stands out in the AI infrastructure market, leveraging its Tomahawk Ethernet switch to lead in data center networking, which is expected to benefit from the growth of AI chip clusters, driving long-term growth.
- Custom Chip Collaborations: Broadcom's partnership with Alphabet to develop tensor processing units (TPUs) has secured a $21 billion order, showcasing its strong capabilities in custom AI chip development and further solidifying its market leadership.
- TSMC's Industry Advantage: Taiwan Semiconductor Manufacturing (NYSE: TSM) is the world's leading chip manufacturer with a near monopoly, working closely with clients to boost capacity and meet surging AI and GPU demand, enhancing its long-term profitability.
- Price Increase Strategy: TSMC has informed customers of a four-year price hike schedule, and combined with capacity expansion, this is expected to further increase its gross margins, reinforcing its competitive edge in the AI infrastructure market.
See More
Top AI Stocks to Buy and Hold
- Broadcom's Growth Potential: Broadcom (AVGO) is poised for significant growth over the next three years, capitalizing on the data center boom and the demand for application-specific integrated circuits (ASICs), with a market cap projected to reach $1.6 trillion due to increased AI infrastructure spending from Alphabet.
- Alphabet's AI Advantage: Alphabet (GOOGL) has accelerated its Google Search revenue with new AI features, and its cloud computing unit saw a 48% revenue surge last quarter, with the deployment of TPUs expected to drive further revenue growth, as Morgan Stanley estimates $13 billion generated for every 500,000 TPUs deployed.
- Micron Technology's Market Demand: Micron Technology (MU), one of the three major DRAM manufacturers, is experiencing a surge in sales and gross margins due to the memory bottleneck in AI infrastructure, with high bandwidth memory (HBM) demand expected to keep the DRAM market tight for the next few years.
- Market Selection Strategy: In the current stock picker’s market, active investors can achieve market-beating returns by strategically investing in high-growth AI stocks like Broadcom, Alphabet, and Micron, leveraging the investment opportunities presented by advancements in AI technology.
See More
Wall Street Analysts Adjust Ratings
- Analyst Rating Changes: Top Wall Street analysts have adjusted their ratings on several companies, including upgrades, downgrades, and initiations, reflecting varying market perspectives on these firms.
- Market Focus: Analysts' views on TSM stock have garnered investor attention, indicating ongoing interest and potential investment opportunities within the semiconductor sector.
- Impact of Rating Changes: These rating adjustments may influence investor decisions, particularly in the current economic climate where analysts' opinions are considered vital market signals.
- Source of Information: A complete overview of analyst rating changes can be found on Benzinga's analyst ratings page, providing a comprehensive market perspective and data support.
See More
AI Infrastructure Market Continues to Boom with Key Investment Opportunities
- Broadcom's Market Leadership: Broadcom (AVGO) is a leader in data center networking, with its Tomahawk Ethernet switch being a key solution in AI data centers, expected to benefit from rapid expansion in AI infrastructure, driving growth over the next decade.
- Demand for Custom AI Chips: The $21 billion order for tensor processing units (TPUs) developed in partnership with Alphabet highlights Broadcom's strong demand in the custom AI chip market, further solidifying its critical role in AI infrastructure.
- TSMC's Industry Advantage: Taiwan Semiconductor Manufacturing (TSM) holds a near-monopoly as the world's leading chip manufacturer, poised to benefit significantly from the growing demand for both GPUs and AI ASICs as AI infrastructure builds out.
- Price Increases and Margin Growth: TSMC has informed customers of a four-year price hike schedule, and combined with its capacity expansion strategy, this is expected to enhance its gross margin of 59.02%, ensuring long-term competitiveness in the AI infrastructure sector.
See More
AI Drives Exponential Growth in Capital Expenditure
- Surge in Capital Expenditure: Top hyperscalers are expected to increase capital expenditures by 70% this year, with Amazon, Alphabet, Meta, and Microsoft planning a combined spending of over $600 billion, indicating a strong commitment to AI infrastructure investment.
- Mixed Market Reactions: Despite the significant increase in capital spending, Amazon and Microsoft's shares have dropped 12% and 16% respectively, while Alphabet's stock is down less than 1% and Meta's has risen by 1%, reflecting investor concerns about the timing of returns on these investments.
- Infrastructure Investment Opportunities: With spending accelerating, investors are drawn to
See More
Bullish Outlook for AI Stocks Amid Spending Surge
- Surge in Capital Expenditures: Amazon plans to spend $200 billion in 2026, with Alphabet and Meta at $185 billion and $135 billion respectively, totaling over $500 billion, indicating that AI infrastructure development is accelerating despite market skepticism about AI spending.
- Opportunities for Nvidia and Broadcom: As major computing unit suppliers, Nvidia and Broadcom are expected to benefit from this massive spending, with analysts projecting a 52% revenue growth for both companies this fiscal year, highlighting that the AI boom is far from over.
- Market Reaction Misalignment: Despite the decline in Nvidia and Broadcom's stock prices due to market sentiment, investors should seize the current undervalued buying opportunity, especially as Nvidia's P/E ratio stands at 24 times, significantly lower than Broadcom's 32 times.
- Technological Collaboration Driving Growth: The soaring demand for Broadcom's TPU chips, developed in collaboration with Alphabet, is expected to further boost Broadcom's sales, reflecting the increasing need for custom chips among AI hyperscalers.
See More
