Broadcom Inc (NASDAQ:AVGO) is highlighted as a stock to watch in the AI trade. Analysts are paying attention due to the company’s diversification. The company is expected to see a 66% increase in AI revenue for the fiscal fourth quarter, with $6.2 billion anticipated. AVGO recently secured $10 billion in AI infrastructure orders from a new customer, believed to be OpenAI.

Broadcom’s strength lies in its production of ASIC, chips designed for specific applications. As companies seek custom chips to challenge Nvidia’s dominance and reduce costs, Broadcom is well-positioned. Top AI spenders are collaborating with Broadcom to develop these chips, which are expected to be high-margin and high-volume products, potentially driving significant revenue and profit growth.

Columbia Threadneedle Global Technology Growth Strategy highlighted Broadcom Inc (NASDAQ:AVGO) in its second quarter 2025 investor letter. The company’s custom accelerator chips are in high demand, leading to 10 consecutive quarters of AI-related semiconductor growth. AVGO’s strong market position and history of returning capital to shareholders bode well for investors.

While AVGO shows promise as an investment, some AI stocks may offer higher returns with limited downside risk. Investors seeking a cheap AI stock that benefits from Trump tariffs and onshoring can explore a free report on the best short-term AI stock.

Read more at Yahoo Finance: Broadcom (AVGO) Bull Shares His ‘Only Hesitation’ About the Stock