Broadcom stock down 25% presents buying opportunity with strong AI growth potential

From Nasdaq: 2025-03-20 07:00:00

Broadcom Inc. (AVGO) is experiencing significant growth in the artificial intelligence (AI) sector, with a 77% increase in AI sales in Q1 FY25. The stock has quadrupled the tech sector in the past decade, with a 200% rise in the last two years, briefly reaching a $1 trillion market cap.

Despite a recent cool-off period, now could be an opportune time to buy Broadcom stock, down nearly 25% from its peak. AVGO offers substantial AI upside and exposure to growth in various sectors, including industrials and smartphones. The company acquired VMware in 2023 to enhance its software portfolio.

Broadcom’s semiconductor solutions play a crucial role in various technologies, such as telecommunication equipment and data center servers. The company collaborates with AI hyperscalers like Meta and Alphabet, and expects a substantial market opportunity from these partnerships. AVGO is also working with additional AI hyperscalers to develop custom accelerators.

In Q1 FY25, Broadcom reported a 77% growth in AI sales, driving total revenue up by 25% and EPS by 45%. The company’s beat-and-raise performance has led to an optimistic earnings outlook, with expected EPS growth of 35% this year and 18% in 2026. CEO Hock Tan anticipates continued strength in AI semiconductor revenue in Q2.

Broadcom is projected to grow its revenue by 20% in FY25 and 15% in FY26, following a 44% expansion in 2024. Despite a recent stock dip, Broadcom has shown strong long-term growth, outperforming most tech stocks. With support levels and positive growth outlook, AVGO remains an attractive investment opportunity.



Read more at Nasdaq: Buy This Top Artificial Intelligence (AI) Stock Down 25% Before It Soars