Broadcom (AVGO) Rallied on Strong AI Momentum

Fund Performance - Baron Durable Advantage Fund returned 2.6% in Q4 2025, closely matching the S&P 500 Index's return of 2.7% [1] - For the full year 2025, the Fund achieved a return of 16.6%, compared to 17.9% for the S&P 500 Index and 16.1% for the Morningstar Large Growth Category average [1] Investment Focus - In 2026, the Fund aims to invest in high-quality, large-cap companies with strong competitive advantages, proven track records, and consistent shareholder returns, amidst geopolitical challenges, regulatory changes, and advancements in artificial intelligence [1] Broadcom Inc. Highlights - Broadcom Inc. (NASDAQ:AVGO) is identified as a significant contributor to the Fund's performance, with a market capitalization of $1.614 trillion [2] - The stock closed at $340.44 per share on February 10, 2026, with a one-month return of 0.16% and a 44.04% increase over the past twelve months [2] Broadcom's Business Overview - Broadcom generates approximately 60% of its revenue from semiconductors and 40% from software, positioning itself at the intersection of AI compute and networking infrastructure [3] - The company reported a 50.6% increase in shares for 2025, driven by strong AI momentum and significant customer engagement, particularly with Google [3] AI Revenue Growth - Broadcom's AI revenue grew by 65% in fiscal 2025, reaching $20 billion, which constitutes nearly one-third of total revenues, with quarterly AI revenues increasing tenfold over the last 11 quarters [3] - The company has an AI backlog of $73 billion, representing almost half of its total backlog of $162 billion, and has secured five AI accelerator customers [3] Overall Company Growth - Broadcom's overall growth for fiscal 2025 was 24%, with EBITDA margins at 67%, indicating strong financial health [3] - The integration of VMware is progressing, and non-AI semiconductor businesses are showing signs of recovery, contributing to the company's growth outlook [3]