Analyst Says Broadcom (AVGO) Not as Expensive 'As One Might Think' - Here's Why

We recently published 10 Stocks to Watch Ahead of Q3 Earnings Season. Broadcom Inc (NASDAQ:AVGO) is one of the stocks that Wall Street analysts are discussing these days.

Saira Malik, chief investment officer at Nuveen, said in a latest program on CNBC that the AI trade is “alive and well” and companies like Broadcom Inc (NASDAQ:AVGO) continue to be the leaders in the space. Here is why the analyst likes Broadcom:

“With AVGO, they have huge demand from hyperscalers for their ASIC chips, very strong management team, ability to earn very strong earnings growth going forward. The stock actually is not as expensive as one might think given its earnings growth trajectory.”

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's 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. Broadcom Inc (NASDAQ:AVGO) continues to be a leader in the AI ASIC and networking chips market. Broadcom Inc (NASDAQ:AVGO) has 3nm AI ASIC chip deals with Alphabet and Meta in addition to many other tech giants aiming massive spending for AI hyperscaling.

Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its second quarter 2025 investor letter:

“Shares of fellow semiconductor giant Broadcom Inc. (NASDAQ:AVGO) also outperformed during the quarter, as customer demand for the company’s custom accelerator chips remained insatiable despite the uncertain economic environment. The company is on pace for 10 consecutive quarters of AI-related semiconductor growth and expects continued strong demand persist, due to the sizable AI opportunity. In addition to its dominant market position, the company’s history of strong capital returns to shareholders results in a favorable outlook for a sizable investor base.”

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.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

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