We recently published a list of 12 Best Major Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Broadcom Inc. (NASDAQ:AVGO) stands against other best major stocks to buy according to billionaires.
The U.S. stock market had one of the worst starts, at least the worst start to a presidency since 1928. The S&P 500 is just recovering following the latest U.S.-China trade deal update, as both countries have agreed to significantly cut tariffs on each other’s imports for 90 days. The S&P 500 index is up by a meagre 0.30% year-to-date, as tech stocks rallied following the tariff reduction.
ALSO READ: 13 Best Technology Stocks to Buy for Long-Term Investment
Tariffs on Hold
Markets finally had a sigh of relief after the U.S.-China trade deal. The tariff reduction potentially negates all bear cases anticipated by Wall Street analysts based on the tariff risks. Sylvia Jablonski, CEO and CIO of Defiance ETFs called the tariff cut a “game changer” in a recent appearance on a CNBC show.
“I think both countries probably saw a little bit of the demise of what would be here with a non-tariff deal as the data came in. You had a lot of complaints around China across all sectors, and then in the US, retailers were reaching out to President Trump and saying that shelves are empty and, you know, a lot of panic about semiconductor software companies. I think that this is really a game changer for both countries, and the big message here is that both countries, it sounds like, decided that they really don’t want to decouple, and, you know, make America great might also mean that, you know, China stays.”
President Trump’s Betting Big on AI
President Trump and his team at the White House have secured around $2 trillion in new company investments since Inauguration Day. The administration emphasizes that these investments indicate a broad economic renaissance. The tech giants are investing following the President’s plan to bring investments into the US. According to Yahoo Finance, these investments are mainly clustered in the world of Big Tech and largely come from sectors where Trump’s Final tariff plans are most uncertain.
Apple and Nvidia have promised to invest $500 billion each in AI infrastructure, manufacturing, and training. Healthcare and new pharmaceutical manufacturing account for almost 11% of the total investments to be made in the U.S., as per Yahoo Finance.
Our Methodology
We have listed the 12 Major Stocks to Buy According to Billionaires, according to Insider Monkey’s database. We picked the 12 stocks with the highest number of billionaire investors, updated as of Q4 2024. All of these billionaire investors are founders or managers of some of the top hedge funds in the world. We have also mentioned the number of hedge funds holding stakes in these stocks. The best major stocks are ranked in ascending order of the number of billionaires that have stakes in them.
Why are we interested in the stocks that hedge funds and billionaire investors pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician working at a magnified microscope, developing a new integrated circuit.
Broadcom Inc. (NASDAQ:AVGO)
No. of Billionaire Holders: 25
No. of Hedge Fund Holders: 161
Broadcom Inc. (NASDAQ:AVGO) is a leading global technology firm that designs, develops, and supplies different types of semiconductors, enterprise software, and security solutions. Broadcom operates through two segments: semiconductor solutions and infrastructure software. AVGO shares soared over 13% as tech stocks rallied following the U.S. and China announcing tariff cuts by 115 percentage points for 90 days.
On May 8, Stacy Ragson from Bernstein reiterated a Buy rating on AVGO with a price target of $250. The analyst maintains a positive outlook on AVGO after the company achieved revenue and earnings surprise during Q1. The company is making progress in AI, as its AI revenue saw a huge surge in Q1, soaring over 77% year-over-year to $4.1 billion, exceeding the guidance of $3.8 billion. Broadcom is making key R&D investments in AI, including the development of the industry’s first 2-nanometer AI XPU. Moreover, the integration of VMware and transition to subscription-based models have been a major boost, as it helped 47% revenue growth for infrastructure software in Q1. The 90-day tariff slash will improve quarterly outcomes further in Q2, driven by these major developments in AI and infrastructure.
Mar Vista US Quality Select Strategy maintains a positive long-term outlook on the company and stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q1 2025 investor letter:
“We maintain a positive outlook on Broadcom Inc. (NASDAQ:AVGO) shares, despite recent stock price pressure stemming from two key concerns: (1) uncertainty around potential tariffs and the impact on global growth, and (2) investor skepticism regarding the return profile of large-scale AI capex investments by hyperscalers. This skepticism has been amplified by the efficiency gains recently demonstrated by DeepSeek, an unknown Chinese software company, which developed a competitive large language model at a much lower cost. These efficiency gains stoked fears that hyperscalers may have overbuilt AI infrastructure.
Broadcom maintains a strong competitive position in the custom AI ASIC market, as well as a disciplined capital allocation, most recently reflected in the VMWare acquisition. That deal is already delivering better than-expected top-line growth and margin expansion. Broadcom is the leading provider of custom AI ASICs and has been steadily diversifying its customer base beyond its initial anchor client, Alphabet. Many hyperscalers are interested in developing custom ASICs, which are tailored to specific computing tasks, given their lower costs and attractive performance attributes relative to general-purpose GPUs from providers like NVIDIA.
While we remain constructive on Broadcom’s long-term prospects, we did trim our position earlier in the quarter at higher levels to reallocate capital toward a more favorable risk-reward opportunity. Nonetheless, Broadcom remains a core holding in our portfolio and offers an attractive margin of safety. We believe the company is well-positioned to grow intrinsic value by +20% over the intermediate term.”
Overall, AVGO ranks 8th on our list of best major stocks to buy according to billionaires. While we acknowledge the potential of AVGO to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that has gone up since the beginning of 2025, while popular AI stocks have lost around 25%. If you are looking for an AI stock that is more promising than AVGO but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.