Was Jim Cramer Right About Broadcom Inc. (AVGO)? A Deep Dive Into the AI Chip Giant’s Journey

The year 2023 marked a turning point for Broadcom Inc. (AVGO), as it emerged as a key player in the AI-driven chip revolution. Jim Cramer, host of Mad Money, has been a vocal advocate for the stock, forecasting its rise to $1 trillion market cap and emphasizing its role in reshaping the AI landscape. But with stock markets volatile and competition fierce, the question remains: Was Cramer right? Let’s dissect the data.

Cramer’s Bullish Case for Broadcom

Cramer’s enthusiasm for AVGO began in late 2023, when he highlighted its 20% stock surge following a strong earnings report and its dominance in AI networking chips. By early 2024, he argued that Broadcom’s custom silicon solutions—such as its XPUs (AI accelerators)—posed a threat to GPU-centric rivals like NVIDIA (NVDA) and AMD (AMD). His charitable trust even held a long position in AVGO, signaling confidence.

His stance evolved through 2024–2025, emphasizing two key themes:
1. AI Infrastructure Leadership: Broadcom’s AI revenue, fueled by hyperscalers like Meta and Alphabet, was set to hit $90 billion by 2027 (a 77% year-over-year jump by Q1 2025).
2. Resilience Amid Volatility: Despite dips during the DeepSeek selloff (Jan 2025), AVGO rebounded due to its diversified revenue streams and VMware’s AI-private cloud synergies.

The Data: AVGO’s Performance

• Stock Surge: From April 2024 to April 2025, AVGO rose 48.57%, outperforming NVDA (-25%) and AMD (-20%) during the same period.
• AI Revenue Growth: AI-related sales hit $4.1 billion in Q1 2025, accounting for 27% of total revenue, with guidance for $4.4 billion in Q2.
• Analyst Consensus: 30 of 33 analysts rated AVGO a “Strong Buy”, with a mean target price of $251.17 (29% upside) and a high estimate of $300 (54.5% gain).

Competitive Landscape: Cramer’s Warnings Validated

Cramer had cautioned that Broadcom’s rise could disrupt GPU-centric peers. The data supports this:
- NVIDIA: While Cramer acknowledged its long-term potential, NVDA’s stock fell 25% since early 2025 as investors reassessed GPU spending priorities.
- AMD: Its perceived edge in AI chip scarcity faded, with Cramer noting its 15% underperformance against AVGO’s AI-focused growth.

Challenges and Risks

Despite the gains, Cramer’s narrative faced headwinds:
1. Market Volatility: AVGO dipped 17% year-to-date (YTD) in early 2025, lagging the Nasdaq’s 8.5% decline. The DeepSeek selloff temporarily eroded gains.
2. Tariff Pressures: U.S. tariffs on Vietnam—a manufacturing hub—raised costs, contributing to a 9% sequential decline in non-AI segments (e.g., wireless).
3. Legacy Business Slowdown: Broadcom’s traditional businesses (e.g., storage, connectivity) saw weaker demand, though VMware’s cloud software revenue surged 47% to offset this.

The Bottom Line: Cramer Was Right—With Caveats

Jim Cramer’s bullish thesis on AVGO holds water. Key validations include:
- Market Cap Milestones: AVGO briefly hit $1 trillion in December 2024, driven by AI revenue growth and its $66 billion EBITDA margin (Q1 2025).
- Institutional Backing: 161 hedge funds held AVGO as of Q4 2024, a 25% increase from 2023, reflecting confidence in its AI playbook.

However, the journey isn’t without risks. Broadcom’s success hinges on:
- Executing its $90 billion AI revenue target by 2027.
- Navigating geopolitical tensions (e.g., U.S.-China trade wars).
- Avoiding overreliance on hyperscaler clients like Meta, which account for 30% of AI revenue.

Conclusion: A Leader in the AI Infrastructure Race

Jim Cramer’s call on Broadcom has largely proven correct. The stock’s 48.57% gain since early 2024, coupled with its $913 billion market cap and AI-driven growth, validate his stance. Broadcom’s XPUs and VMware synergies position it as a critical backbone for data centers—a role Cramer foresaw.

Yet investors must remain cautious. While AVGO’s fundamentals are robust, the AI sector’s volatility and geopolitical risks mean it’s no sure bet. Cramer’s own advice to consider “cheaper AI stocks” trading at <5x earnings” underscores the need for a diversified tech portfolio.

For now, though, the data says: Cramer was right. Broadcom’s AI leadership isn’t just a trend—it’s a structural shift.

This analysis incorporates data through April 2025. Market conditions and company performance may vary.