Lockheed Martin (NYSE: LMT) is a leading defense stock, but President Donald Trump recently said defense companies should not be allowed to do stock buybacks, distribute dividends, or offer executives large salaries. If that happens, a lack of buybacks and dividends could make Lockheed Martin less appealing.
Instead, Broadcom (NASDAQ: AVGO) is seeing robust demand for its AI chips. In its fiscal fourth quarter of 2025, Broadcom's AI semiconductor revenue surged by 74% year over year. CEO Hock Tan told investors he expects AI revenue to double year over year in the first quarter.
Broadcom recently unveiled its Wi-Fi 8 platform, which offers stronger Wi-Fi for consumers using streaming services, AI-powered apps, and other energy-intensive resources. This platform can generate deals with smartphone makers, service providers, enterprise clients, and Wi-Fi router companies.
AI models like ChatGPT and Grok have been key innovations, but physical AI—AI that operates in the physical world—is on the horizon. Surgical robots, delivery robots, and self-driving vehicles are examples that will require AI chips like Broadcom's.
The Motley Fool Stock Advisor analyst team identified what they believe are the 10 best stocks for investors to buy now, and Broadcom was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor's total average return is 955%—a market-crushing outperformance compared to 196% for the S&P 500. Marc Guberti has positions in Broadcom. The Motley Fool recommends Broadcom and Lockheed Martin.