Demand For High-Growth Momentum Stocks Lifted Broadcom (AVGO) in Q2

Renaissance Investment Management, an investment management company, released its Q2 2025 “Large Cap Growth Strategy” investor letter. A copy of the letter can be downloaded here. The stock market experienced significant volatility in the second quarter, and yet, the S&P 500 posted an all-time high by the end of June. The liberation day tariff announcement set off havoc in the market, causing stock prices to drop 7% from April 2 to April 7. However, the market rebounded and gained more than 22% from the April 7 low through the end of June. The Russell 1000 Growth returned 17.8% and the S&P 500 returned 10.9% in the quarter. Large caps significantly outperformed their small-cap counterparts, and growth outperformed value. Against this backdrop, the strategy outperformed the S&P 500 Index but underperformed the Russell 1000 Growth benchmark. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its second-quarter 2025 investor letter, Renaissance Large Cap Growth Strategy highlighted stocks such as Broadcom Inc. (NASDAQ:AVGO). Broadcom Inc. (NASDAQ:AVGO) designs and develops various semiconductor and infrastructure software solutions. The one-month return of Broadcom Inc. (NASDAQ:AVGO) was 7.62%, and its shares gained 127.16% of their value over the last 52 weeks. On September 09, 2025, Broadcom Inc. (NASDAQ:AVGO) stock closed at $336.67 per share, with a market capitalization of $1.584 trillion.

Renaissance Large Cap Growth Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its second quarter 2025 investor letter:

"Broadcom Inc. (NASDAQ:AVGO) was the largest contributor to our portfolio performance in the second quarter after reporting strong operating results and guidance. The stock benefited from continued invest tor enthusiasm for high growth momentum stocks, as well as from companies with exposure to artificial intelligence. Importantly, Broadcom has been growing its hyperscale and connectivity product portfolios, resulting in increasing revenue exposure to faster growing artificial intelligence applications and offsetting a slowdown in its legacy semiconductor business."

Broadcom Inc. (NASDAQ:AVGO) is in 12th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 156 hedge fund portfolios held Broadcom Inc. (NASDAQ:AVGO) at the end of the second quarter, compared to 158 in the previous quarter. In the fiscal third quarter of 2025, Broadcom Inc. (NASDAQ:AVGO) reported record revenue of $16 billion, up 22% year-over-year. While we acknowledge the potential of Broadcom Inc. (NASDAQ: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.

In another article, we covered Broadcom Inc. (NASDAQ:AVGO) and shared the list of stocks Jim Cramer discussed. Broadcom Inc. (NASDAQ:AVGO) was a top contributor to Janus Henderson Forty Fund's during Q2 2025. 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.