Analyst Explains Why He’s Bullish on Broadcom (AVGO) Amid AI Agent Revolution

Broadcom Inc (NASDAQ:AVGO) is one of the 10 Stocks to Buy and Sell in 2025: Top Analyst Calls.

Ben Reitzes, Melius Research managing director, recently said in a program on CNBC that AI chip companies will benefit in the future amid an increase in the usage of LLMs and inference. He thinks “seat-based” business models are under threat from AI.

“Agents are just going to be able to do this. And what it’s going to do is it’s going to reduce your software seats. So seat-based models are threatened and outcome-based models are rewarded. And what that means is like infrastructure software could do better, but it really just means keep buying Nvidia, guys. They’re going to power the AI models. You know, they’re going to win. Maybe keep buying the clouds who are going to host all and deploy it. But the SaaS guys, it’s going to be tough.”

Asked which companies can benefit the most from this trend, the analyst named Broadcom Inc (NASDAQ:AVGO).

“I mean Broadcom has a great portfolio of infrastructure software and of course they’re leading and doing great.”

Photo by L N on Unsplash Broadcom’s moat? It makes ASICs, chips designed for specific applications and tasks. As major companies look for custom chips to break Nvidia monopoly and lower costs, Broadcom is positioned well to thrive. Many top AI spenders are teaming up with Broadcom to develop these chips, which are expected to be high-margin, high-volume products, potentially driving substantial growth in both revenue and profits.

Mar Vista U.S. Quality Premier Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its second quarter 2025 investor letter:

“Broadcom Inc. (NASDAQ:AVGO) shares rebounded from their calendar Q1 decline as investor concerns surrounding Trump-era trade tensions and the risk of suboptimal returns on large-scale AI capex by hyperscalers proved to be overstated. The company delivered a solid fiscal Q2 2025 (April quarter) and guided for accelerating AI semiconductor revenue growth through FY2026.