ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Value Strategy” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The third quarter experienced significant gains for U.S. equities, which recovered from a fear of slowing economic growth that had driven several asset markets into correction territory. A broad rebound was then induced by a 50 basis point interest rate drop by the Federal Reserve. The Russell 1000 Value Index generated a gain of 9.43% for the quarter. Against this backdrop, The ClearBridge Large Cap Value Strategy underperformed the benchmark Russell 1000 Value Index during the quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
ClearBridge Large Cap Value Strategy highlighted stocks like Broadcom Inc. (NASDAQ:AVGO) in the third quarter 2024 investor letter. Broadcom Inc. (NASDAQ:AVGO) designs and develops various semiconductor and infrastructure software solutions. The one-month return of Broadcom Inc. (NASDAQ:AVGO) was 10.73%, and its shares gained 110.25% of their value over the last 52 weeks. On October 10, 2024, Broadcom Inc. (NASDAQ:AVGO) stock closed at $185.69 per share with a market capitalization of $867.28 billion.
ClearBridge Large Cap Value Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q3 2024 investor letter:
“In IT, we bought Broadcom Inc. (NASDAQ:AVGO) as we believe the company has a long runway for growth with its custom silicon business, which should be more durable and less volatile than other components within the AI food chain. We also believe the acquisition of VMware creates another opportunity for steady, subscription-based durable growth that is still in its early innings. We believe the stock has an attractive risk/reward profile given the reasonable visibility toward mid-teens EPS growth at a low-20s P/E multiple. We made room for Broadcom by exiting Lam Research, whose shares we believed priced in a full recovery, while we grew increasingly concerned that China exposure might create an air pocket.”
A technician working at a magnified microscope, developing a new integrated circuit.
Broadcom Inc. (NASDAQ:AVGO) is in 15th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 130 hedge fund portfolios held Broadcom Inc. (NASDAQ:AVGO) at the end of the second quarter which was 115 in the previous quarter. In the fiscal Q3 2024, Broadcom Inc. (NASDAQ:AVGO) reported consolidated net revenue of $13.1 billion, up 47% year-on-year. While we acknowledge the potential of Broadcom Inc. (NASDAQ:AVGO) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Broadcom Inc. (NASDAQ:AVGO) and shared the list of best AI data center stocks. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.