From Nasdaq: 2024-11-15 07:15:00

Artificial intelligence (AI) investing continues to be a major trend in the markets, with Broadcom (NASDAQ: AVGO) emerging as a top performer, up around 60% this year. However, hedge fund Point72, managed by Steve Cohen, sold two-thirds of its Broadcom holdings in Q2, raising questions about the stock’s future performance.

Broadcom’s business spans hardware and software, with notable products like VMware. Its AI-related offerings, such as networking switches and custom AI accelerators, have shown significant growth. However, concerns arise when excluding VMware’s impact, revealing weaker growth trends in other sectors.

Despite strong Q3 results, Broadcom’s future growth may face challenges, with expectations possibly inflated. Trading at 24 times 2025 earnings, Broadcom’s valuation is on par with other AI leaders like Taiwan Semiconductor, Meta Platforms, and Alphabet. Investors must weigh Broadcom’s mixed performance against its peers before making investment decisions.

While Broadcom may not be a sell like Point72’s move suggests, investors should consider other options for AI exposure. The Motley Fool’s Stock Advisor team has identified 10 top stocks for potential high returns, excluding Broadcom. Past recommendations like Nvidia have delivered significant gains, highlighting the service’s track record of outperforming the S&P 500 since 2002.



Read more at Nasdaq: Billionaire Steve Cohen Is Selling This Hot Artificial Intelligence (AI) Stock