10 Best AI Data Center Stocks to Buy Now

5. Broadcom Inc. (NASDAQ:AVGO)

Upside Potential: 39.15%

Number of Hedge Fund Holders: 183

BofA, in a note dated January 26, 2026, set out the semiconductor market as “stretched semicaps, compelling compute, and half-full analog,” emphasizing compute as the most desirable segment. Broadcom Inc. (NASDAQ:AVGO) was listed as one of BofA’s top four compute stocks, alongside Nvidia, AMD, and Credo.

The group currently trades at about 24x CY27 earnings, or 0.5x PEG, which BofA considers a compelling valuation backdrop. Looking ahead, the firm anticipates that this group will generate average sales growth of 42% and adjusted EPS growth of 49% between 2025 and 2027. Expectations that hyperscale cloud providers will reiterate the “mission-critical need” to invest in compute infrastructure support the thesis as well. Meanwhile, BofA’s tracker indicates that cloud capex will grow by 38% year-over-year in 2026, possibly reaching 50%+ by year’s end, while overall free cash flow is still positive.

On January 15, 2026, Wells Fargo upgraded Broadcom Inc. (NASDAQ:AVGO) to Overweight, raising its price target from $410 to $430. This comes amid improved entry points and higher revenue projections for AI semiconductors. Earlier, on January 9, 2026, Bernstein demonstrated confidence in Broadcom’s leadership in ASICs despite growing AI competition, reiterating an ‘Outperform’ rating with a $475 target.

Broadcom Inc. (NASDAQ:AVGO) focuses on designing and supplying semiconductors and infrastructure software. The company serves the data center, networking, broadband, wireless, and enterprise markets with advanced chip solutions and mission-critical software platforms that support cloud, AI, and connectivity.