Broadcom (AVGO) rebounded after an initial selloff

Columbia Threadneedle Investments, an investment management company, has released its investor letter “Columbia Threadneedle Global Technology Growth Strategy” for the third quarter of 2024. A copy of the letter can be downloaded here. Stock markets rose again, marking a fourth straight quarter of positive stock returns as the Federal Reserve cut interest rates for the first time since the start of the pandemic, with a much-anticipated 0.5% (50 basis points) cut marking a shift lower a more balanced policy. For the quarter, the fund returned -0.94%, compared to the S&P Global 1200 Information Technology Index-net’s return of 0.72%. Security selection influenced the fund’s performance compared to the benchmark. Additionally, you can check out the fund’s top 5 holdings to find the best picks for 2024.

Columbia Threadneedle Global Technology Growth Strategy highlighted stocks like Broadcom Inc. (NASDAQ:AVGO) in its third-quarter 2024 investor letter. Broadcom Inc. (NASDAQ:AVGO) designs and develops various semiconductor and infrastructure software solutions. Broadcom Inc. (NASDAQ:AVGO)’s one-month return was -8.05%, and its shares gained 74.16% of their value over the last 52 weeks. On November 25, 2024, Broadcom Inc. (NASDAQ:AVGO) stock closed at $164.82 per share with a market cap of $769.8 billion.

Columbia Threadneedle Global Technology Growth Strategy stated the following about Broadcom Inc. (NASDAQ:AVGO) in its third quarter 2024 investor letter:

“Similar to Nvidia’s earnings results, shares of Broadcom Inc. (NASDAQ:AVGO) initially sold off after the company reported solid earnings that fell short of rising market expectations, but the stock recovered from its decline within a few weeks. With an enticing combination of tailored chip offerings and networking resources, Broadcom remains one of the best-positioned companies in the AI ​​revolution. Broadcom outlined a path to get a majority of its revenue from the AI ​​end market within a few years, and the non-AI part of the business has stabilized after a deep correction. The Company’s dominant market position in its end markets, coupled with sustained growth, strong margins and world-class capital allocation, provides the opportunity to increase capital over time.”

A technician works on a magnifying microscope and develops a new integrated circuit.

Broadcom Inc. (NASDAQ:AVGO) ranks at number 15 on our list of the 31 most popular stocks among hedge funds. According to our database, Broadcom Inc. (NASDAQ:AVGO) held 128 hedge fund portfolios at the end of the third quarter, up from 130 in the previous quarter. While we recognize Broadcom Inc. (NASDAQ:AVGO)’s potential as an investment, we believe that AI stocks are more promising to deliver higher returns, within a shorter time frame. If you’re looking for an AI stock that has the same promise as NVIDIA but costs less than five times its earnings, check out our report on it cheapest AI stock.

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