Broadcom is positioning itself as a strong AI stock with significant growth potential.
From Nasdaq: 2024-12-21 03:15:00
- Nvidia (NASDAQ: NVDA) dominates the data center GPU market for AI, with a 90% share. Its growth has rewarded investors, but its high valuation, with a price-to-sales ratio of 29 and earnings multiple of 54, poses a challenge.
- Broadcom (NASDAQ: AVGO) saw a 51% revenue increase in Q4 2024, driven by AI chip demand. Its organic revenue growth was 9%, and it forecasts a 22% revenue increase for Q1 2025. AI revenue reached $12.2 billion in fiscal 2024.
- Broadcom expects 65% YoY growth in AI revenue in the current quarter to $3.8 billion. It aims to capture a $60-$90 billion market by fiscal 2027, with a strong position in custom AI chips.
- Analysts anticipate Broadcom’s revenue to jump 19% and earnings to rise 28% in the current fiscal year. The company’s PEG ratio of 0.72 makes it an attractive AI stock with growth potential.
- Motley Fool’s Stock Advisor team doesn’t list Broadcom among the 10 best stocks to buy now. Despite this, Broadcom’s strong position in the AI chip market and growth outlook suggest potential for significant gains.
Read more at Nasdaq: Missed Out on Nvidia: 1 No-Brainer Artificial Intelligence (AI) Stock to Buy Before It Crushes the Market in 2025, and Beyond