Broadcom stock is a buy despite YTD dip, with strong portfolio, partner base, and cash flow.

From Nasdaq: 2025-03-24 11:24:00

Broadcom (AVGO) shares have dropped 17.3% YTD due to sell-offs in tech stocks following fears of a recession from President Trump’s tariffs. Despite this, the dip presents a buying opportunity with a strong portfolio and partner base, solid VMware business, and impressive free cash flow.

Broadcom’s innovative AI chips, used by major tech companies like Alphabet and Meta Platforms, are driving top-line growth. The company’s new 3.5D XPUs offer better efficiency and power savings, setting them apart in the market. AVGO’s future plans include 3-nanometer and 2-nanometer XPUs for hyperscale customers.

Broadcom’s infrastructure software revenues, led by VMware, are growing thanks to a shift towards subscription-based models. The company’s collaboration with NVIDIA is driving adoption of its VCF platform, with strong growth expected in ISG revenues for the second quarter of fiscal 2025.

With a strong balance sheet and solid free cash flow, Broadcom is well-positioned to pay dividends and buy back shares. Earnings estimates for fiscal 2025 show positive growth trends, with a Zacks Rank #1 (Strong Buy) and upward revisions in estimates.

Although AVGO stock is trading at a premium, its expanding AI portfolio and strong partner base justify the valuation. The company’s Growth Score of B and Zacks Rank #1 make it a favorable investment opportunity for growth-oriented investors.

Zacks Investment Research offers insights into 7 best stocks for the next 30 days, including Broadcom (AVGO) and other top picks. These elite stocks have a track record of outperforming the market and are worth considering for potential price pops in the near future.



Read more at Nasdaq: 3 Reasons Why the Broadcom Stock is a Buy Despite 17% YTD Dip