We recently compiled a list of the 35 Trending AI Stocks in Latest News and Analyst Ratings. In this article, we will analyze where Broadcom Inc. (NASDAQ:AVGO) stands against other trending AI stocks.
As earnings season continues, investors are eager to see how investments in artificial intelligence (AI) among S&P 500 companies are paying off. Analysts expect earnings growth to slow, with S&P 500 earnings expected to rise 5.3% compared to the same quarter last year, up from a 13.2% increase in the second quarter , according to a report by the Reuters news agency. The technology and communications services sectors are expected to show the greatest year-over-year growth, with technology earnings forecast to increase 15.4% and communications services 12.3%. AI-related companies have dominated earnings narratives since last year, generating substantial gains in the market. The S&P 500 is currently at all-time highs, having risen approximately 21% so far this year, driven largely by strong performance in the technology and communications sectors.
Read more about these developments by accessing 10 unattractive AI stocks according to Goldman Sachs and 10 Hot AI Stocks According to Goldman Sachs.
Howard Chan, CEO of Kurv Investment Management, noted that analysts are interested in evaluating how large companies monetize their AI initiatives, and those that are successful in this regard are noticeably rewarded. Meta, for example, saw a surge in share prices after projecting strong sales growth, suggesting its digital advertising revenue is effectively funding its AI investments. By contrast, spending by giants like Google on AI technologies has raised questions about their integration with existing business models. With the S&P 500 trading at 22.3 times forward 12-month earnings estimates, beating its long-term average of 15.7, many investors hope this quarter’s earnings justify higher stock valuations. Solita Marcelli of UBS Global Wealth Management expressed optimism that upcoming third-quarter results could catalyze further gains, particularly as the semiconductor sector remains a focal point for AI investment.
Read more about these developments by accessing 30 Top AI Stocks According to BlackRock and Beyond the tech giants: 35 non-tech AI opportunities.
Our Methodology
For this article, we select AI stocks by analyzing news articles, stock analysis, and press releases. These stocks are also popular with hedge funds.
Why are we interested in the stocks that hedge funds are accumulating? The reason is simple: Our research has shown that we can outperform the market by imitating the best stock picks from the best hedge funds. Our quarterly newsletter strategy selects 14 large- and small-cap stocks each quarter and has returned 275% since May 2014, outperforming its benchmark by 150 percentage points (see more details here).
A technician working on a magnified microscope, developing a new integrated circuit.
Broadcom Inc. (NASDAQ:AVGO)
Number of hedge fund holders: 130
Broadcom Inc. (NASDAQ:AVGO) provides semiconductor and infrastructure software solutions. Cantor Fitzgerald recently raised his price target on the stock to $225 from $200 and maintained an Overweight rating on the stock heading into the third quarter earnings season. The investment firm sees a story of two kinds of semis, those leveraged on the traditional semicycle and those leveraged on the secular AI story, the advisor told investors in a research note, adding that, at the same time, the fundamental backdrop has deteriorated. for the last three months, and the vision of a prolonged cycle remains intact. Broadcom is one of the frontrunners in AI, Cantor said.
AVGO general occupies eighth place on our list of trending AI stocks. While we recognize AVGO’s potential as an investment, our conviction lies in the belief that some AI stocks hold more promise for generating higher returns and doing so in a shorter period of time. If you’re looking for an AI stock that has more promise than AVGO but trades at less than 5 times earnings, check out our report on cheapest AI stocks.
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Disclosure: None. This article was originally published in Internal jumpsuit.