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Broadcom is in the AI 'sweet spot': Strategist

Shares of Broadcom (AVGO) are surging following its second quarter earnings beat, driven by robust demand for its artificial intelligence offerings. This rally has spread across the broader semiconductor sector. To provide insight into this unfolding narrative, Nancy Tengler, CEO and chief investment officer of Laffer Tengler Investments, joins the discussion on Market Domination.

Tengler characterizes Broadcom as "the poor man's Nvidia (NVDA)," noting its inclusion in her "12 Best Ideas" portfolio. She highlights the company's strategic positioning, noting its position "in the sweet spot" of the generative AI sector as it benefits from its exposure to both hardware and software components. Tengler emphasizes that AI-related names "are at the center" of her investment portfolio, stressing the significance of this technology.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Angel Smith

Video transcript

Broadcom.

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It's one of the top trending ticket on Yahoo Finance.

The stock has been soaring on earnings and the 10 for one stock split and Nancy back in December, you were on Yahoo Finance, you actually pick Broadcom as your top stock to watch and those shares are up 12% to on the back of the strong A I fueled earnings.

I'm curious, let's leave.

Let's leave Tesla side for a little bit.

I'm curious if Broadcom is still at the top of your list and is still one that you would add to even after the big upside it's had.

Yes, Julie.

So we call it the poor man's NVIDIA in our firm and it's a member of our 12 best ideas portfolio.

Uh by the way, Haw Tan is the highest paid CEO in the country and I, I'm willing to pay that as a shareholder because he's earned me about almost 1000% since which we, since we added the name, but they are in the sweet spot.

They did, they did integrate the VM ware transaction um effectively.

And it's a creative, that's what he always does.

He did that with computers.

So and so you have a company that is in the sweet spot of uh of generative A I computing has a strong relationship with uh NVIDIA uh in the enterprise space, but is also almost 50% exposed to software.

So it sort of smooths out the cyclical aspects of the semiconductor business.

So we continue to like it.

I mean, it, it, they're growing the dividend as they always have, they're buying back shares, but most importantly, they're growing the underlying business.

Uh the poor man's in video.

I think if I ever meet Hock Tan, I'm, I'm not using that one, Nancy, I gotta tell you.

But there, there was um there was sort of this interesting ripple across some other A I hardware names, Nancy uh at least early in the training day.

So Marvel um Aisa Super Micro besides NVIDIA uh and broad comments.

Are there any other ways you're, you're kind of playing that A I theme right now?

Yeah, it's Josh, that's a great question.

It's at the center of our portfolio.

So we're buying old economy companies that are embracing the new technologies.

And I've talked about that a lot.

So think Walmart as the poster child of, you know, utilizing robotics, generative A I cloud computing uh and uh digitization.

So the, that's one of our themes and then the other are the underlying providers.

And so in this, in the hardware space, uh we like lamb research, we own uh NVIDIA.

I'm sorry, Broadcom.

We do not own NVIDIA, as I mentioned.

And, and we had said a couple of weeks ago when software was selling off, look, the hedge funds, the hedges are selling because they're focused somewhere else.

They'll come back and I think they're coming back to many of the names we own like service.

Now.

Um, we'll see what Adobe Reports today, but certainly Microsoft and other members of the enterprise, uh Cloud Amazon.

Um you know, the hyper scalar part of the business, that's where we're focused oracle big holding of ours, Nancy.

We'll catch up with you again soon.

Thanks for being a good sport and thanks for being with us today.

Really appreciate it.

Thank you, Julie.

Thanks Josh.