5 High Profit Margin Stocks to Buy According to Hedge Funds

3. Broadcom Inc. (NASDAQ:AVGO)

Broadcom Inc. (NASDAQ:AVGO) ranks among the best high profit margin stocks to buy. On March 5, Benchmark reaffirmed its Buy rating and $485 price target for Broadcom Inc. (NASDAQ:AVGO), highlighting the company’s better-than-expected second-quarter forecasts. Broadcom Inc. (NASDAQ:AVGO) exceeded market estimates with earnings per share of $2.05, compared to the projection of $2.02. The company also topped revenue expectations, reporting $19.31 billion versus $19.21 billion.

Broadcom Inc. (NASDAQ:AVGO) expects its AI revenue to be significantly greater than $100 billion in the coming year. The company also mentioned supply obligations that span through 2028. That said, the market’s key issue is whether hyperscaler and LLM capital expenditures can be managed absent a near-term return on investment slowdown.

Meanwhile, management emphasized enhanced multi-year visibility, which will be fueled by an increasing number of six key platform users expanding their training and inference capacities. Demand, according to the company, is becoming centered among these hyperscaler partners.

Broadcom Inc. (NASDAQ:AVGO) is a semiconductor and infrastructure software company. It designs and supplies products, including custom chips, networking solutions, and enterprise software used across industries such as cloud computing, telecommunications, and data centers.