Why Has Ark Invest Repeatedly Added to Broadcom (AVGO)? Its Big Ideas Report Offers a Clue Maham Fatima Thu, November 12, 2026 at 6:32 AM EST 4 min read AVGO +1.88% ^GSPC +1.31% ^IXIC +1.60% Trade AVGO on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
We just published the list of the 10 Best Growth Stocks to Buy for the Next Decade, and Broadcom (NASDAQ:AVGO) ranks 7th on it.
On November 5, the S&P 500 fell 4.36%, its worst day since the April 2025 tariff crash, with roughly $3 trillion in value wiped off S&P 500 companies. The Nasdaq Composite dropped 5.52% to slip into a correction, and chip stocks took the hardest hit, with the Philadelphia Semiconductor Index falling about 12%, its worst day since 2020. The slide followed a rough October, when the technology sector of the S&P 500 lost 6.8%, its biggest monthly drop since March 2025, while defensive groups such as consumer staples had a record month. Growth stocks tend to feel these swings first, because their prices rest on the promise of faster sales and earnings than the rest of the market.
The worry behind the selling is money. Investors are asking how companies will pay for their enormous artificial intelligence budgets and whether the returns will justify them. The midterm election results added a second concern, as investors began questioning whether the pace of data center construction could slow if new rules follow, which would weigh on AI spending. Our ranking of semiconductor stocks to hold for the next decade covers more of the group that took the sharpest hit.
A growth stock is a share in a company expected to grow its sales and earnings faster than the market average. These companies usually reinvest profits instead of paying dividends, so shareholders are rewarded through a rising share price, which is why the shares often carry high price-to-earnings ratios. A high multiple is not automatically expensive if the growth keeps coming, but it leaves little room for disappointment, and a stock priced for strong growth can fall sharply when the numbers fall short. Time helps in the other direction, because returns that stay invested earn returns of their own, a snowball effect that builds the longer the money is left alone.
The economy is adding another variable. October's jobs report showed payrolls up 165,000, far above the 65,000 economists expected, and traders now put the odds of a Federal Reserve rate hike in December above 75%. Edward Jones senior global strategist Angelo Kourkafas called it a "blowout jobs report." A strong economy is good for business, but higher interest rates make far-off earnings worth less today, which tends to weigh most on growth stocks. For readers hunting for bargains after the pullback, our list of undervalued growth stocks is a place to start. For long-term holders, the more useful question is not what the market does next month but which companies can keep compounding through several more months like this one.
Broadcom earned its spot with a market cap of $1.53 trillion, and it had 170 hedge fund holders in Q2 2026.
Cathie Wood's Ark Invest has repeatedly added to Broadcom, although the firm sold some shares during the November 5 market selloff, and its Big Ideas report projects that data center spending on AI will rise nearly threefold by 2030, with the custom chips Broadcom designs for the biggest cloud companies set to capture a share of it. Stanley Druckenmiller's family office opened a new Broadcom position.
The numbers back the pitch. In the fiscal third quarter, Broadcom's AI semiconductor revenue reached $16.7 billion, up 221% from a year earlier. Chief Executive Officer Hock Tan expects the fiscal fourth quarter to climb to $21.7 billion and has laid out an AI revenue outlook of about $115 billion for fiscal 2027. Free cash flow also set a record for the company.
What makes those targets believable to the bulls is how much supply is already lined up. Tan has also set a fiscal 2028 AI target well above that level and said Broadcom has line of sight to the supply it needs, which the bulls read as a base that grows with every new chip generation rather than a one-year spike or a single strong quarter's worth of orders.
Read our analysis on Broadcom (AVGO) here: Broadcom's AI Revenue Surges 221%, But is Growth Becoming Too Dependent on AI Spending?
While we acknowledge the potential of AVGO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: Nvidia Is Becoming More Than a Chipmaker. Can it Sustain Its Exceptional Margins? and Nvidia vs. Microsoft: Is NVDA's Explosive Growth Being Undervalued?
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