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Market Sell-Off: Can Buying These 3 "Safe" Stocks Today Set You Up for Life?
AVGOBroadcom(AVGO) The Motley Fool·2025-03-24 12:00

Group 1: Market Overview - The U.S. equity market has experienced significant growth, with the S&P 500 index rising nearly 53% over the past two years due to a favorable macroeconomic environment and the adoption of AI technologies [1][2] - Recent weeks have seen a decline in U.S. stocks amid concerns over a potential trade war and economic uncertainty, presenting an opportunity for investors to acquire high-quality stocks at reasonable valuations [2] Group 2: Broadcom - Broadcom's shares are currently down approximately 21% from their 52-week high of 249.3,makingitanattractiveinvestmentfor2025[3]−ThecompanyreportedstrongfiscalQ12025results,withrevenueincreasing25249.3, making it an attractive investment for 2025 [3] - The company reported strong fiscal Q1 2025 results, with revenue increasing 25% year over year to 14.9 billion and adjusted EBITDA rising 41% to 10.1billion,alongsidefreecashflowsof10.1 billion, alongside free cash flows of 6 billion, resulting in a free cash flow margin of 40% [4] - Broadcom's AI business is a key growth driver, generating 4.1billioninrevenueinQ1,a774.1 billion in revenue in Q1, a 77% increase year over year, and is projected to reach 4.4 billion in Q2, indicating a 44% year-over-year growth [5] - The company is well-positioned in the AI infrastructure market, with a serviceable addressable market projected to be between 60billionand60 billion and 90 billion by fiscal 2027, and global AI infrastructure spending expected to exceed 200billionannuallyby2028[6]−Thesemiconductorsolutionssegment,includingAI,sawrevenuegrowthof11200 billion annually by 2028 [6] - The semiconductor solutions segment, including AI, saw revenue growth of 11% year over year to 8.2 billion, while the infrastructure software segment revenue surged 47% to 6.7billion,enhancingrevenuevisibilityandmargins[7]−BroadcomistradingataforwardP/Emultipleof30,significantlylowerthanitsfive−yearaverageof69,suggestingafavorableentrypointforlong−terminvestors[8]Group3:BerkshireHathaway−BerkshireHathaway′sshareshaveincreasedby15.96.7 billion, enhancing revenue visibility and margins [7] - Broadcom is trading at a forward P/E multiple of 30, significantly lower than its five-year average of 69, suggesting a favorable entry point for long-term investors [8] Group 3: Berkshire Hathaway - Berkshire Hathaway's shares have increased by 15.9% in 2025, reflecting solid performance [9] - The company reported a 27% year-over-year increase in operating earnings to 47.4 billion, with the insurance business contributing significantly through a 66% rise in underwriting earnings to 9billionanda42.89 billion and a 42.8% increase in investment income to 13.7 billion [10] - Berkshire Hathaway held 334.2billionincashattheendof2024,providingflexibilityforacquiringhigh−qualityassets[11]−ThecompanyhasincreaseditsinvestmentsinJapanesetradingcompanies,withanaggregatecostof334.2 billion in cash at the end of 2024, providing flexibility for acquiring high-quality assets [11] - The company has increased its investments in Japanese trading companies, with an aggregate cost of 13.8 billion and a market value of 23.5billionattheendof2024,indicatingastrategicfocusoninternationalmarketexpansion[13]−BerkshireHathaway′sbalancedgrowthprofileandrobustfinancialsmakeitanappealinginvestmentforlong−terminvestors[14]Group4:EliLilly−EliLilly′sgrowthhasbeendrivenbytherapidadoptionofitsGLP−1receptoragonisttherapies,withtheglobalGLP−1marketexpectedtogrowfrom23.5 billion at the end of 2024, indicating a strategic focus on international market expansion [13] - Berkshire Hathaway's balanced growth profile and robust financials make it an appealing investment for long-term investors [14] Group 4: Eli Lilly - Eli Lilly's growth has been driven by the rapid adoption of its GLP-1 receptor agonist therapies, with the global GLP-1 market expected to grow from 49.3 billion in 2024 to 157.5billionby2035[15][16]−Mounjaro′ssalesreached157.5 billion by 2035 [15][16] - Mounjaro's sales reached 11.5 billion in 2024, a 124% increase year over year, while Zepbound contributed 4.9billion,togetheraccountingfor36.54.9 billion, together accounting for 36.5% of Eli Lilly's total revenue [17] - The company has committed over 23 billion to expand manufacturing capacity for its drugs, achieving production targets that significantly increase saleable doses of GLP-1 therapies [18] - Eli Lilly's overall revenue grew 32% year over year to 45billion,withnetincomejumping10645 billion, with net income jumping 106% to 10.6 billion in 2024, showcasing the strength of its diversified drug portfolio [19] - Despite its successes, Eli Lilly trades at a forward P/E ratio of 35.6, lower than its historical average of 74.8, indicating a potential buying opportunity for long-term investors [20]