Broadcom, IBD Stock Of The Day, Sets Up Ahead Of Earnings
Broadcom is the IBD Stock Of The Day as the fabless chipmaker and infrastructure software provider prepares to report its fiscal second-quarter results on June 5.
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an hour ago
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Broadcom, Nvidia, and AMD Could Help This Unstoppable ETF Turn $250,000 Into $1 Million in 10 Years
Data center spending could top $1 trillion per year by 2028 to meet surging demand for computing capacity driven by artificial intelligence (AI). Suppliers of data center chips and components, such as Nvidia, Broadcom, and Advanced Micro Devices, could be poised for significant growth. The iShares Semiconductor ETF holds those three stocks along with 27 others, and it could turn $250,000 into $1 million over the coming decade. 10 stocks we like better than iShares Trust - iShares Semiconductor ETF › Nvidia (NASDAQ: NVDA) CEO Jensen Huang thinks that data center operators will spend $1 trillion every year on chips and infrastructure by 2028 to meet growing demand for computing capacity from next-generation artificial intelligence (AI) models. That spending will be an enormous tailwind for Nvidia, which supplies the world's most powerful data center chips for AI development. But the benefits will also flow through to the company's competitors, not to mention suppliers of other data center hardware components. There is an opportunity for investors to profit from this tech revolution, and buying an exchange-traded fund (ETF) might be the simplest way to do so. The iShares Semiconductor ETF (NASDAQ: SOXX) invests exclusively in suppliers of chips and components, and its top holdings happen to be three of the biggest names in AI: Nvidia, Broadcom (NASDAQ: AVGO), and Advanced Micro Devices (NASDAQ: AMD). The ETF has outperformed the broader stock market since its establishment in 2001, and here's how it could turn an investment of $250,000 into $1 million within the coming decade. Some ETFs hold thousands of different stocks, but the iShares Semiconductor ETF holds just 30. It aims to offer investors exposure to companies that design, manufacture, and distribute semiconductors, primarily those that stand to benefit from megatrends such as AI. Since the ETF was established in 2001, it has helped investors successfully navigate several tech revolutions driven by the internet, enterprise software, smartphones, and cloud computing. It's now heavily geared toward AI, and its top five holdings are among the biggest names in the hardware side of the industry: Stock iShares ETF Portfolio Weighting 1. Broadcom 10.07% 2. Nvidia 8.74% 3. Texas Instruments 7.49% 4. Advanced Micro Devices (AMD) 7.30% 5. Qualcomm 5.83% Data source: iShares. Portfolio weightings are accurate as of June 4, 2025, and are subject to change. ETF = exchange-traded fund. Nvidia's graphics processing units (GPUs) are the most popular data center chips among AI developers. The company's latest GPU architectures, Blackwell and Blackwell Ultra, are designed for a new generation of AI models capable of 'reasoning,' which means they spend time thinking in the background to generate the most accurate responses. Jensen Huang says some of these models consume up to 1,000 times more computing capacity than traditional one-shot large language models (LMs), hence his lofty spending forecast mentioned earlier. Amazon, Microsoft, and Alphabet are three of Nvidia's biggest customers. They are seasoned data center operators because of their industry-leading cloud platforms, but they are now racing to build AI infrastructure to meet surging demand from developers. But these companies are also trying to diversify their hardware portfolios by designing their own chips in collaboration with suppliers like Broadcom, which helps with the design and manufacturing processes. Broadcom is targeting a $90 billion market opportunity for its custom AI accelerator chips by 2027, with just three customers already on board and more in the pipeline. Plus, the company is a leading supplier of networking equipment, which helps to extract the most performance from AI chips. Then there is AMD, which released a line of GPUs to compete directly with Nvidia in the data center. This year, the company will start shipping its latest chips based on its CNA (Compute DNA) 4 architecture, which was designed to rival Blackwell. AMD is also already a leader in AI chips for personal computers, which could be a major growth area in the future. Investors will also find other leading AI chip stocks, such as Micron Technology, Taiwan Semiconductor Manufacturing, and Arm Holdings, outside the top five holdings in the iShares ETF. The iShares Semiconductor ETF has delivered a compound annual return of 10.4% since its establishment in 2001, outperforming the average annual gain of 7.9% in the S&P 500 over the same period. But the ETF has delivered an accelerated annual return of 20.9% over the past decade, driven by the accelerating adoption of technologies like cloud computing and AI. If the iShares ETF continues to deliver annual gains of 20.9%, it could turn a $250,000 investment into over $1.6 million in the next decade. It won't be easy, but if AI infrastructure spending grows to $1 trillion per year by 2028, as Jensen Huang expects, it certainly isn't out of the question. However, even if the ETF averages an annual gain of 15.6% over the next 10 years, that would be enough to turn $250,000 into $1 million: Starting Balance Compound Annual Return Balance in 10 Years $250,000 10.4% $672,404 $250,000 15.6% (midpoint) $1,065,413 $250,000 20.9% $1,668,026 Calculations by author. Last year, Huang said data center operators could earn $5 over four years for every $1 they spend on Nvidia's AI chips and infrastructure by renting the computing capacity to AI developers. If those economics are accurate, data center operators like Amazon, Microsoft, and Alphabet are likely to continue investing heavily in new infrastructure long into the future. Plus, every new generation of AI models typically requires even more computing capacity than the last, so it's possible that Huang's spending forecasts will prove to be conservative when we look back on this moment. In any case, the iShares ETF could be a great addition to a diversified portfolio. Before you buy stock in iShares Trust - iShares Semiconductor ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and iShares Trust - iShares Semiconductor ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Microsoft, Nvidia, Qualcomm, Taiwan Semiconductor Manufacturing, Texas Instruments, and iShares Trust-iShares Semiconductor ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Broadcom, Nvidia, and AMD Could Help This Unstoppable ETF Turn $250,000 Into $1 Million in 10 Years was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13 hours ago
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3 Top AI Stocks to Buy in June 2025
Nvidia continues to dominate the AI market with cutting-edge chips, a robust software ecosystem, and advanced networking technologies. Broadcom has emerged as a prominent player in AI infrastructure, leveraging its custom AI chips and VMware software stack. CoreWeave is seeing explosive growth with Nvidia's backing. 10 stocks we like better than Nvidia › The U.S. equity market made a strong recovery in May 2025, fueled by robust earnings, decreasing trade tensions, and rising investor confidence in the U.S. economy -- a significant improvement compared to the market's performance in April 2025. Now, Deutsche Bank analysts have raised the target for the benchmark S&P 500 index from 6,150 to 6,550 by the end of 2025. Given this renewed market optimism, artificial intelligence (AI) stocks are poised to be key beneficiaries of the next wave of capital inflows. Long-term investors can benefit from this trend by investing in these high-quality, artificial intelligence (AI)-powered companies that offer significant growth potential in the evolving market landscape. June is a good time to take a closer look at these three top AI stocks. Nvidia (NASDAQ: NVDA) has reported stellar results for the first quarter of fiscal 2026 (ended April 27, 2025). The company reported revenue of $44.1 billion, representing a 69% year-over-year increase. Nvidia also generated a solid $26 billion in free cash flow. Nvidia currently accounts for nearly 80% of the AI accelerator market. While a dominant presence in AI training workloads, the company is also focused on inference (real-time deployment of pre-trained models) workloads. The company is at the forefront of handling reasoning workloads (computationally intense and complex inference workloads) with its Blackwell architecture systems. Major cloud providers are already deploying these chips at a massive scale -- almost 72,000 GPUs weekly -- and plan to ramp up even more in the coming quarter. Hence, Blackwell is powering the next phase of AI where technology is thinking longer, solving problems, and giving better answers than just responding with pre-written answers. Besides hardware leadership, Nvidia's robust software ecosystem has ensured developer lock-in and a sticky customer base. With the CUDA parallel programming platform, TensorRT for deployment, and NIM microservices for inference, clients find it extremely costly and time-consuming to switch to competitors. The company has also built a healthy networking business, with this segment's revenue growing 64% quarter over quarter to $5 billion in the first quarter. Thanks to the technological superiority of its comprehensive ecosystem, Nvidia managed to provide a healthy outlook for fiscal 2026's Q2, despite its revenue being negatively affected by nearly $8 billion due to export restrictions for the Chinese market. Nvidia stock trades at 31.8 times forward earnings, which is not a particularly cheap valuation. But considering its growth trajectory and competitive advantages, Nvidia is a smart AI pick now, even at elevated valuation levels. Broadcom (NASDAQ: AVGO) has emerged as a prominent AI infrastructure player in 2025. The company's custom AI chips and networking solutions are being increasingly used by three prominent hyperscaler clients -- rumored to be Alphabet, Meta Platforms, and Chinese company ByteDance -- to optimize the execution of their specific workloads. CEO Hock Tan expects the three hyperscalers to generate a serviceable addressable market (SAM) of $60 billion to $90 billion in fiscal 2027. Additionally, the company is engaging with four additional hyperscalers to develop custom chips, underscoring the even larger market potential. Beyond custom chips, Broadcom is building the critical networking infrastructure that enables the training and deployment of large and powerful frontier AI models. The company's recent $69 billion acquisition of VMware positioned it as a key player in the enterprise software and hybrid cloud infrastructure space. With VMware's cloud orchestration and virtualization technologies, Broadcom can offer full-stack AI infrastructure solutions to its clients. Broadcom stock currently trades at 37.8 times forward earnings. However, considering its critical role in building global AI infrastructure, the company is an excellent pick, despite the rich valuation. Previously a cryptocurrency mining operator, CoreWeave (NASDAQ: CRWV) has now positioned itself as a prominent "AI Hyperscaler." Unlike traditional hyperscalers such as Amazon's AWS, Microsoft's Azure, or Alphabet's Google Cloud Platform, which are primarily designed for general-purpose applications, CoreWeave's cloud infrastructure has been specifically designed for AI and machine-learning workloads. The company has established an extensive network of 33 purpose-built AI data centers across the United States and Europe. Solid demand for CoreWeave's specialized AI-first cloud infrastructure is directly driving its exceptional financial performance. The company reported $982 million in revenue in the first quarter of fiscal 2025, up 420% year over year. At the same time, the company's adjusted operating income rose 550% year over year to $163 million. This highlights that the company is on its way to becoming profitable, despite the high level of capital expenditures typical in the AI data center business. The company had a massive $25.9 billion revenue backlog from multi-year contracts at end of the first quarter. CoreWeave's strategic partnership with Nvidia is proving to be a significant competitive advantage. The deep relationship has given the company preferential access to Nvidia's cutting-edge GPUs and advanced networking technologies. With Nvidia having more than a $2.5 billion equity stake in CoreWeave (at current prices), the latter is practically assured of continued access to next-generation GPUs in the coming years. CoreWeave stock currently trades at 37.5 times sales, which seems quite rich. However, the elevated valuation is justified considering the company's huge addressable market, robust contract backlog, and impressive financial performance, making it a buy now. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. 3 Top AI Stocks to Buy in June 2025 was originally published by The Motley Fool
Yahoo
14 hours ago
- Yahoo
Broadcom Inc. (AVGO): A Bull Case Theory
We came across a bullish thesis on Broadcom Inc. (AVGO) on Sanjiv's Substack. In this article, we will summarize the bulls' thesis on AVGO. Broadcom Inc. (AVGO)'s share was trading at $246.93 as of 6th June. AVGO's trailing and forward P/E were 90.05 and 37.88 respectively according to Yahoo Finance. spacedrone808/ Broadcom stands at the heart of AI infrastructure buildout, with surging demand for its custom XPUs and Ethernet-based networking solutions. The company expects at least three hyperscalers to deploy over one million AI-accelerated clusters each by 2027, with custom silicon playing a dominant role. Volume shipments are already underway to three such customers, while four additional large tech firms are deeply engaged in development, potentially expanding Broadcom's AI TAM beyond the current $60–90 billion estimate. Demand is increasingly inference-led, with Broadcom anticipating a steeper ramp in XPU orders through late 2025. Networking demand is also accelerating, especially in high-density scale-up configurations within data centers, where Broadcom's new Tomahawk 6 switch, offering 102.4 Tbps throughput, is uniquely positioned. AI aside, the VMware acquisition is proving accretive, with strong uptake of VCF (vSphere Cloud Foundation) enabling on-prem private AI deployments. Over 87% of Broadcom's largest customers have adopted VCF, while ARR is growing in double digits. Core enterprise software benefits from an open ecosystem and tight NVIDIA collaboration, as evidenced by uptake of the Private AI Foundation. Non-AI segments remain sluggish, though broadband and server storage saw sequential growth. Valuation is stretched: at ~$247, AVGO trades at ~30x forward earnings and ~29.6x forward FCF, yielding 3.3–3.4%. A DCF analysis with conservative assumptions implies a fair value of ~$208, suggesting a 15% premium. Given high R&D intensity and strategic positioning in custom silicon and AI networking, Broadcom's long-term prospects are strong, but its near-term upside appears limited. Previously, we highlighted a on Broadcom (AVGO) by Daan Rijnberk on Substack in March 2025, which emphasized the company's exceptional AI-driven growth, VMware integration, and industry-leading margins. The stock has appreciated by approximately 26% since our coverage. Sanjiv focuses on Broadcom's custom silicon ramp, inference-led XPU demand, and expanding AI TAM via deep hyperscaler partnerships. While both agree on Broadcom's centrality to the AI buildout, Rijnberk sees valuation as attractive post-pullback, whereas Sanjiv expresses near-term caution given the stock's premium pricing. Broadcom Inc. (AVGO) is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 158 hedge fund portfolios held AVGO at the end of the first quarter which was 161 in the previous quarter. 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 have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
