10 AI Stocks on Wall Street’s Radar

5. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 158

On May 28, Melius Research raised the firm’s price target on Broadcom Inc. (NASDAQ:AVGO) to $283 from $198 and kept a “Buy” rating on the shares. Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.

Analysts at Melius Research noted that the company’s momentum in the past year has been “materializing better than we expected.” The company is all prepared to accelerate sales of its artificial-intelligence chips, which include custom AI accelerators and networking chips.

Moreover, since the company is a market leader, it is also likely to see higher profits from its ownership of VMware, a cloud-computing business. The company acquired VMware in 2023. The analysts noted that Broadcom Chief Executive Hock Tan “has created a portfolio of high-margin and sticky assets.”

Moreover, Broadcom is “still one of the ‘must-own’ AI stocks,” the firm believes. With its customer base growing and AI hyperscalers focusing on developing reasoning models, its switching business, which makes up about 30% of total AI revenue, “should accelerate as well over the next few years as AI clusters scale out.”

The firm has said that there is more for Broadcom as AI customer wins pick up pace and execution remains sharp in Infrastructure Software.