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We recently compiled a list of the 20 High Growth Mega Cap Stocks You Can Buy And Hold For Next 5 Years. In this article, we are going to take a look at where Broadcom Inc. (NASDAQ:AVGO) stands against the other high growth mega cap stocks.
Exactly 5 years ago, the world struggled to deal with a black swan event: the COVID-19 pandemic. There was so much uncertainty that people didn’t even know if they’d be alive in the next few weeks, let alone figure out where the market was heading. Anyone who invested in the S&P 5 years ago would have gained 83%. If you had bought at the exact bottom, you’d have gained twice that amount.
What the above proves is that the present isn’t necessarily an indicator of what the future holds. All companies that had their workflows disrupted have recovered, some more than others. Some companies have strengthened their supply chains. Others have improved their work-from-home capabilities. Industries like airlines and restaurants have modified their business models to cater to the new dynamics.
These companies have been able to deal with the changing dynamics because of their financial strength and innovation. A company’s past performance and its finances give a good idea of whether it will be able to survive bad times. That’s why when we look at the best mega-cap stocks to hold for the next 5 years, we look at how well they have grown in the last 5 years.
To come up with our list of top 20 mega-cap stocks to hold for the next 5 years, we considered stocks with a market cap of at least $200 billion and a 5-year sales growth rate of at least 10%.
A technician working at a magnified microscope, developing a new integrated circuit.
Broadcom Inc. (NASDAQ:AVGO)
Broadcom Inc. (NASDAQ:AVGO) is a developer, designer, and seller of different semiconductor devices. AVGO operates through infrastructure software and semiconductor solutions segments. It offers mobile device connectivity solutions, optical and copper physical layer devices, Ethernet switching and routing custom silicon solutions, and other products and services. The company has grown its revenue by 18.69% over the last 5 years.
Broadcom Inc. (NASDAQ:AVGO) ’s recent growth has come from its custom chip business, as hyperscalers switch from using generic GPUs for AI training to custom GPUs. This trend is unlikely to stop anytime soon and Broadcom is the leader in the segment by a long margin. The company also has a short-term positive trigger as the US government tries to figure out how to resurrect the struggling chipmaker Intel. Analysts at Piper Sandler believe that if Broadcom can get a piece of Intel’s products division, it will be a very lucrative deal for the company: