Mizuho TMT analysts say Broadcom is a must-own AI stock

Investing.com -- Mizuho analysts called Broadcom (NASDAQ:AVGO) a "must-own" AI stock in a note Friday, citing its strong earnings beat, growing AI revenue, and leadership in key semiconductor areas. 

The analysts believe Broadcom’s latest earnings report and guidance make it the standout among AI semiconductor stocks, particularly compared to peers like Nvidia (NASDAQ:NVDA) and Marvell (NASDAQ:MRVL) Technology.

"There is a lot to like from AVGO’s quarter and conference call," Mizuho (NYSE:MFG) wrote, highlighting Broadcom’s ability to "beat, raise, and see stock go up" at a time when other AI names have struggled. 

He pointed out that Broadcom avoided the weaker gross margin guidance that impacted Nvidia and does not face the same supply chain challenges that have plagued Marvell.

One of Broadcom’s key advantages is said to be its leadership in networking and custom silicon, two high-growth areas in AI infrastructure. 

"AVGO has both the R&D, reputation, and key customer relationships to sustain and grow their revenues and position in both key segments for many years to come. No one else can really touch them," Klein noted.

The company also announced two new ASIC design wins that could enter production in 2027, adding to its existing $60-90 billion total addressable market target. 

BofA explains that these programs, along with increased spending from cloud hyperscalers on networking, position Broadcom for continued growth.

Despite the broader tech sector’s recent volatility, Mizuho argues that investors should look beyond the near-term market correction. 

"I would not overthink AVGO. It is a must own in my view if you can look past the near-term Tech correction and melt-down," he stated, adding that Broadcom’s earnings potential could push its stock toward a $240-$250 range.