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Semiconductor giant Broadcom Inc. (AVGO) has been among the big winners in the artificial intelligence (AI)-fueled market, and its recent correction hasn’t done much to alter that. After registering an impressive 120% gain last year, the stock took a sharp dip recently. Yet, it continues to remain in focus on Wall Street as a high-quality stock that stands to gain from AI expenditure well into next year.
That sentiment was reiterated recently by GMO Portfolio Manager Tom Hancock, who considered Broadcom a relatively safe AI bet because it’s more diversified. Not all stocks with an AI link rely on a single product cycle or market demand. Broadcom already has multiple product cycles with semiconductor and infrastructure software business. The growth engine for Broadcom is AI, but that isn’t its lone source. Its biggest weakness, according to Hancock, is valuations.
