Which Strong-Buy-Rated Tech Stock Is Best?

The tech sector has continued to stay hot so far this year. Though valuations may be a tad uncomfortable for those who’ve yet to punch their ticket, it has to be comforting that the Wall Street crowd still views many of the high flyers (like AVGO, CDNS, and NOW) as Strong Buys.

Therefore, in this piece, we’ll look at TipRanks’ Comparison Tool to check in with those three impressive performers in the tech scene with generative artificial intelligence (AI) catalysts that could help them achieve more gains.

Broadcom (NASDAQ:AVGO)

While most of the attention in the semiconductor scene may be focused on the two top AI chip firms, diversified chip play Broadcom has quietly rocketed higher. While the $592 billion chip giant may not be the bountiful dividend payer it once was, it still stands out as one of the higher-growth plays in the semiconductor scene, at least according to many on Wall Street.

To take it further, I view AVGO stock as sporting a more palatable valuation — 27.4 times forward price-to-earnings (P/E) — versus many of its chip rivals. As such, I’m staying bullish on the stock but acknowledge that near-term turbulence could be in the cards.

It’s hard to believe that the stock used to command a dividend yield north of 3-4%. After more than doubling (up 112% in the past year), the yield has compressed to 1.64%. Looking back, it’s clear that Broadcom stock should never have fallen below $500 per share back in late 2022. Chalk that one as a misstep made by Mr. Market.

Despite the hot rally (or should I say melt-up) in the stock, JPMorgan (NYSE:JPM) analysts are raging bulls on Broadcom stock this year, going as far as to call it the biggest AI chip play after Nvidia (NASDAQ:NVDA). This is partly thanks to Broadcom’s “leadership position in AI-related products” such as high-end AI ASICs (application-specific integrated circuits) — a lower-power alternative to GPUs for AI acceleration.

Indeed, it’s not just about GPUs when it comes to AI…