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TD Cowen Adjusts Broadcom (AVGO) Valuation, Highlights Long-Term AI Tailwinds

Broadcom Inc. (NASDAQ:AVGO) is included among the Goldman Sachs Dividend Stocks: Top 14 Stock Picks.

Photo by NeONBRAND on Unsplash

On February 24, TD Cowen lowered its price recommendation on Broadcom Inc. (NASDAQ:AVGO) to $405 from $450. The firm maintained a Buy rating on the shares as part of its earnings preview. In a research note, the analyst said investment in AI infrastructure continues to rise, and expectations are still moving higher. TD Cowen expects this trend to support semiconductor estimates in 2026 and 2027. At the same time, share valuations have pulled back. The firm believes this creates an opportunity for investors. It also said it remains positive on the computing and networking segment.

Much of Broadcom’s recent growth has come from its customized application-specific integrated circuits, or ASICs, which help accelerate AI workloads. At the same time, the company expanded into infrastructure software by acquiring major businesses, including VMware. This shift helped diversify its revenue beyond the traditional semiconductor cycle. The expansion also strengthened Broadcom’s position with large data center customers. By offering both chips and software, the company created more integrated solutions. This approach helped deepen customer relationships and made its offerings harder to replace.

In fiscal 2025, which ended last November, Broadcom’s AI chip sales rose 65% to $20 billion. These sales accounted for 31% of its total revenue. Strong demand for AI chips helped offset slower performance in non-AI semiconductors and infrastructure software, which tend to move with broader economic cycles. Looking ahead, Broadcom expects AI chip revenue to reach $60 billion to $90 billion annually by fiscal 2027.

Broadcom Inc. (NASDAQ:AVGO) operates as a global technology company. It designs, develops, and supplies semiconductors, enterprise software, and security solutions. Its business runs through two main segments: semiconductor solutions and infrastructure software.

While we acknowledge the potential of AVGO to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AVGO and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 13 Best Strong Buy Dividend Stocks to Invest In and 14 Best Low Volatility Dividend Stocks to Invest In

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The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

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