Key Takeaways Broadcom posted Q3 earnings beat and projects strong Q4 revenues on AI accelerator demand.AVGO holds a 12-month net profit margin of 31.6%, reflecting solid profitability. NVIDIA reported Q2 gains from data center GPU sales, with a 52.4% net profit margin.Investors should search for profitable companies that produce strong returns after covering all operating and non-operating expenditures. Therefore, it’s sensible to invest in a profitable company rather than one that is losing money.   Here, ...

Core Insights - Investors should prioritize companies that demonstrate strong profitability after accounting for all expenses, favoring profitable firms over those with losses [1] - NVIDIA Corporation, Broadcom Inc., and ServiceNow, Inc. are identified as top investment picks for the second half of the year due to their high net income ratios [2] Net Income Ratio - The net income ratio is a critical measure of a company's profitability, indicating the percentage of net income relative to total sales revenues, with a higher ratio suggesting effective revenue generation and expense management [3] Screening Parameters - Additional criteria for identifying potential investment winners include: - Zacks Rank of 3 or lower, allowing only 'Strong Buys', 'Buys', and 'Holds' [4] - Trailing 12-month sales and net income growth exceeding industry averages [4] - Trailing 12-month net income ratio higher than industry benchmarks [5] - A strong buy percentage rating greater than 70% [5] - These parameters narrowed the stock universe from over 7,685 to just 11 candidates [5] Company Highlights - **NVIDIA Corporation (NVDA)**: - Provides solutions for graphics, computing, and networking globally - Achieved a 12-month net profit margin of 51.7% and holds a Zacks Rank of 3 [5][7] - **Broadcom Inc. (AVGO)**: - Develops semiconductor devices and infrastructure software solutions worldwide - Reports a 12-month net profit margin of 22.6% and also holds a Zacks Rank of 3 [6][7] - **ServiceNow, Inc. (NOW)**: - Offers cloud-based solutions for digital workflows across various regions - Has a 12-month net profit margin of 13.8% and maintains a Zacks Rank of 3 [8][7]

Core Insights - NorthCrest Asset Management, LLC sold approximately $6.50 million worth of Broadcom shares, totaling 30,024 shares during Q2 2025, reducing its stake but still holding a significant position in the company [1][2][3] Company Overview - Broadcom has a market capitalization of $1.29 trillion, with a revenue of $57.05 billion and a net income of $13.24 billion for the trailing twelve months (TTM) [5] - The company has experienced a one-year price change of 62.3% and its shares closed at $275.40 on July 10, 2025, reflecting a 58.89% increase over the past year [3][5] - Broadcom's dividend yield is 0.84%, and its forward P/E ratio stands at 56.95 [4] Business Segments - Broadcom operates in the semiconductor and infrastructure software sectors, providing solutions for networking, broadband, wireless, storage, and industrial applications [5][6] - The company has seen significant growth in its infrastructure software segment, particularly following its $69 billion acquisition of VMware in November 2023, which has enhanced its enterprise software solutions [9][10] Financial Performance - Over the last five years, Broadcom's revenue grew by 145%, while operating income surged by 471%, indicating strong operating leverage and scalability [8] - The company has reported ten consecutive quarters of growth in its AI semiconductor segment, with the infrastructure software segment driving growth in recent months [9][10] Investment Position - After the recent sale, Broadcom accounts for 4.37% of NorthCrest's $3.72 billion in reportable U.S. equity assets, with top holdings including Nvidia, Microsoft, Apple, and Amazon [3]