Broadcom Inc. (NASDAQ:AVGO) is one of the tech and consumer sector stocks that Jim Cramer talked about. Cramer was bullish on the stock during the episode, as he stated:
“I am glad to hear tonight, though, according to the Wall Street Journal, that OpenAI is trying to raise a $100 billion at an $830 billion valuation. That’s up from $750 billion yesterday. Not bad, huh? If it can raise $100 billion at that valuation, well, then the company can keep building out data centers aggressively. And stocks like NVIDIA and Broadcom should be bought tomorrow.”
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Broadcom Inc. (NASDAQ:AVGO) supplies semiconductor devices and infrastructure software, including networking, connectivity, and storage solutions. The company’s products are used for applications in data centers, telecommunications, broadband, smartphones, industrial systems, and AI networking. During the December 15 episode, Cramer noted that he trusts the company CEO and that he has never been let down by him. The Mad Money host said:
“Last week turned brutal for the AI data center stocks when we got this pair of poorly received quarters from Oracle on Wednesday and then Broadcom on Thursday night. Oracle plunged 10.8% the next day. Broadcom dropped 11.4% on Friday. Dragged the whole group down with them. Now, as I mentioned in my Sunday think piece for the CNBC investing club, I’m not that worried about Broadcom, which we own for the Charitable Trust. Broadcom reported a healthy top and bottom-line beat. They gave strong sales and EBITDA guidance for the current quarter.
The stock only got hit because the CFO inartfully mentioned on the conference call that their AI business will include more full rack systems next year, meaning more systems with components not entirely made by Broadcom, and thus, the gross margins on those systems will be lower.
Oh, really scary. Oh, was the market stupid about this. It’s not a big deal, people. But remember, the stock had run up a great, really dramatically going into the quarter, so it got slammed. At the end of the day, I trust Broadcom CEO Hock Tan, he has never ever let me down, to keep delivering excellent numbers.
He will do it again. Historically speaking, every time the market’s doubted this guy, the market has been dead wrong. I told club members in that same think piece that I would hold onto Broadcom, but after today’s 20-point decline, it might be time to switch directions. Do some buying. So I feel good about Broadcom. You’re getting a real nice buying opportunity now… Broadcom, like I said to club members, stay close to your email. We could be pulling the trigger to buy more any minute.”
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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Disclosure: None. This article is originally published at Insider Monkey.
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