From Nasdaq: 2024-10-19 07:00:00

Broadcom (NASDAQ: AVGO) is a popular AI investment choice, but its diverse product line may limit its benefit from AI shifts. Despite revenue growth, when excluding VMware’s impact, growth was only 4% year over year. While its AI products are performing well, its stock comes with a high forward PE ratio of nearly 38 times earnings.

Broadcom’s strongest AI products, like connectivity switches and custom accelerators, are seeing significant growth. analysts project a 17.5% revenue increase in FY 2025. However, with a high stock price, investors may question if now is the right time to buy. While Wall Street remains optimistic, future growth and expectations are a test for Broadcom.

As a company with various product lines, it’s hard to gauge the full impact of AI on Broadcom. The stock may be too expensive compared to faster-growing, cheaper AI stocks like Alphabet or Meta Platforms. Investors should consider other options, as the future impact of AI on Broadcom’s business remains uncertain. The Motley Fool’s 10 best stocks for investors to buy now do not include Broadcom.



Read more at Nasdaq: Is Broadcom a Top Artificial Intelligence (AI) Stock to Buy Right Now?