We just covered Here is How Billionaire Philippe Laffont’s Top 10 Picks Crushed The Market. Broadcom Inc. (NASDAQ:AVGO) ranks #8 (see the Here is How Billionaire Philippe Laffont’s Top 5 Picks Crushed The Market).
YTD Stock Performance: +22%
Philippe Laffont’s Stake: $1.90 Billion
Broadcom Inc. (NASDAQ:AVGO) is up about 22% so far this year amid rising demand for custom AI chips. Tech companies spending billions on AI infrastructure want chips made for their needs and intend to cut reliance on expensive Nvidia hardware. This has made AVGO chips popular. According to a Deloitte report, the custom AI chip market is expected to exceed $50 billion in 2026.
Broadcom Inc’s (NASDAQ:AVGO) moat is strong and wide because there are only a few companies capable of delivering high‑performance custom chips tailored for large‑scale AI workloads. Broadcom designs application‑specific ASICs and XPUs. These chips are preferred by hyperscalers for massive inference tasks because they can reduce the total cost of ownership by roughly 40–60% compared with GPU clusters.
Networking is another area where Broadcom Inc. (NASDAQ:AVGO) is strongly positioned to benefit from the AI boom. The company’s Tomahawk and Jericho switching chips are widely used in hyperscale data centers to connect large clusters of GPUs, enabling fast data movement inside AI training systems. Industry estimates suggest Broadcom Inc. (NASDAQ:AVGO) holds a dominant position in high-end data center switching silicon, often cited in the ~70–90% range depending on how the segment is defined.
Clearbridge Dividend Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q1 2026 investor letter:
“In IT, we exited Oracle and trimmed Broadcom Inc. (NASDAQ:AVGO). On the semiconductor side, we modestly reduced our position in Broadcom to fund our new investment in Taiwan Semiconductor (TSMC). While Broadcom remains well positioned, and we remain constructive on the stock, the risk-reward outlook has… (Click Here to Read the Letter in Detail).”
Photo by Mika Baumeister on Unsplash
While we acknowledge the risk and potential of AVGO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AVGO and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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