Is Broadcom (AVGO) a Smart Long-Term Investment?

Parnassus Investments, an investment management firm, released its “Parnassus Value Equity Fund” second-quarter 2025 investor letter. The fund focuses on owning a concentrated portfolio of U.S. large-cap stocks. The full letter is available for download here. For the second quarter of 2025, the fund reported a net return of 7.24%, outperforming its benchmark, the Russell 1000 Value Index, which returned 3.79% for the same period. The fund’s top 5 holdings are also listed in the letter, showing the firm’s main investment positions heading into 2025.

One of the companies mentioned in the letter is Broadcom Inc. (NASDAQ:AVGO). Broadcom Inc. (NASDAQ:AVGO) designs, develops, and supplies various semiconductor devices and infrastructure software solutions worldwide. Over the past month, the stock rose by 10.20%, and it gained 85.10% over the last 12 months. On July 29, 2025, Broadcom Inc. (NASDAQ:AVGO) shares closed at $297.42, with a market capitalization of $1.399 trillion.

Here is what they have to say about Broadcom Inc. (NASDAQ:AVGO) in their investor letter:

"Broadcom Inc. (NASDAQ:AVGO) stock outperformed as investors rewarded companies positioned to benefit from the boom in AI investment. The semiconductor company’s position in custom chips for AI continues to strengthen."

Broadcom Inc. (NASDAQ:AVGO) ranks 12th in our list of the 30 most popular stocks among hedge funds. According to our data, 158 hedge fund portfolios held positions in Broadcom Inc. (NASDAQ:AVGO) at the end of the first quarter of 2025, down from 161 in the previous quarter. Broadcom Inc. (NASDAQ:AVGO) reported Q2 2025 no-GAAP EPS of $1.58, slightly above analyst expectations of $1.57. While we acknowledge the potential of AVGO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

Broadcom Inc. (NASDAQ:AVGO) ranks 12th in our list of the 30 most popular stocks among hedge funds. According to our data, 158 hedge fund portfolios held positions in Broadcom Inc. (NASDAQ:AVGO) at the end of the first quarter of 2025, down from 161 in the previous quarter. Broadcom Inc. (NASDAQ:AVGO) reported Q2 2025 no-GAAP EPS of $1.58, slightly above analyst expectations of $1.57. 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 doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AVGO and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Broadcom Inc. (NASDAQ:AVGO) and shared Mizuho analyst Vijay Rakesh’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.