We recently published 10 Buzzing AI Stocks to Watch in September. Broadcom Inc. (NASDAQ:AVGO) is one of the stocks to watch in September.
Dan Nathan, the principal of RiskReversal Advisors and CNBC Fast Money trader, was recently asked during a program whether there are other names out there that investors can consider in addition to Nvidia. Here is what Nathan said:
“This is kind of consensus here but it would be Broadcom and Marvell. So the idea that you know Nvidia has this customer concentration. You know who they are. They’re all the hyperscalers. They’re Open AI and all of them are working let’s say with Broadcom or Marvell to create their own custom chips, right?”
For the fiscal fourth quarter, AVGO expects $6.2 billion in AI revenue, up 66% from a year earlier. The company said it secured $10 billion in AI infrastructure orders from a new customer. Many analysts believe this customer is OpenAI. Some media reports said the two companies co-designed a chip that will be launched next year.
What’s Broadcom’s moat? It makes ASIC, chips designed for specific applications and tasks. As major companies look for custom chips to break Nvidia monopoly and lower costs, Broadcom is positioned well to thrive. Many top AI spenders are teaming up with Broadcom to develop these chips, which are expected to be high-margin, high-volume products, potentially driving substantial growth in both revenue and profits.
Janus Henderson Forty Fund stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its second quarter 2025 investor letter:
“Broadcom Inc. (NASDAQ:AVGO), another top contributor in AI infrastructure, has benefited from hyperscalers’ interest in a second source behind NVIDIA’s merchant silicon. The semiconductor company leads in custom silicon development, offering lower cost and better efficiency for specific workloads that don’t require maximum performance GPUs. The market also continues to evolve as custom silicon has gained share relative to merchant chips. Broadcom’s leadership position makes it a clear beneficiary of this shift.”
While we acknowledge the 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.
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Disclosure: None. This article is originally published at Insider Monkey.
