AVGO and PM: Analysts Say These Are Their Top Picks for 2026

The stock market has been a bit volatile recently, with doubts about the timing of interest-rate cuts fueling sharper day-to-day swings. Investors have also been on edge ahead of high-stakes Nvidia earnings and the delayed September jobs report, both of which could help clarify whether the recent momentum has room to run.

But overall, the broader backdrop remains constructive enough that analysts are already turning their attention to what comes next. With only a few weeks left in the year, Wall Street is rolling out its Top Picks for 2026, using the calendar shift to highlight the stocks they see as well-positioned for the year ahead.

Among the standouts, Broadcom (NASDAQ:AVGO) and Philip Morris (NYSE:PM) are emerging as ‘top picks’ for 2026. Both are leaders in their respective arenas, and in completely different industries, offering investors built-in diversification. Let’s see what makes them so compelling.

Broadcom

We’ll start with Broadcom, one of the world’s leading semiconductor companies. The firm is a heavyweight by any standard. Over the past four quarters (3Q24 through 2Q25), it generated just under $60 billion in revenue, placing it fourth among global chipmakers. Its market cap, near $1.62 trillion, makes it the second-largest publicly traded semiconductor company and the sixth-largest among all trillion-dollar names on Wall Street. Broadcom’s stock has also outpaced the broader market this year, advancing 48% versus the NASDAQ’s 18% gain.

A significant portion of Broadcom’s recent momentum stems from the AI boom driving demand across the tech sector. While its core portfolio – ranging from high-end cable modems to advanced fiber-optic components – continues to perform well, the company has earned increased recognition for its AI-oriented semiconductor offerings. In particular, Broadcom has become a leader in application-specific integrated circuits (ASICs).

These custom-designed ASICs are essential in cloud computing and AI workloads. Although they carry higher upfront costs, they deliver meaningful gains in efficiency, offering more processing power per watt consumed. That makes them especially valuable for AI systems, data centers, and large-scale cloud infrastructure, where power demands are substantial.

Broadcom’s scale gives it the ability to manufacture ASICs and other networking and semiconductor products at levels that meet the needs of hyperscalers and enterprise customers. This production flexibility has solidified the company’s position across high-tech supply chains, particularly in server architectures and high-speed networking. Broadcom also plays an important role in industry R&D, helping shape the next generation of processors and infrastructure hardware.

Broadcom is also deepening its ties to the AI ecosystem. In mid-October, the company unveiled a multiyear partnership with OpenAI, the creator of ChatGPT, to co-develop next-generation accelerators and Ethernet solutions. The first deployments from this collaboration are expected to roll out in the second half of 2026 and continue through 2029.

Also of note, Broadcom has been reporting steady quarterly gains in revenue and earnings over the past several years. In its last financial release, covering fiscal 3Q25, the company showed quarterly revenue of $15.95 billion. This was up 22% year-over-year and beat the forecast by $129.3 million. At the bottom line, Broadcom’s $1.69 in non-GAAP EPS was up from $1.24 in the prior-year period and was 3 cents better than had been expected.

For Jefferies analyst Blayne Curtis, the key is the increasingly large potential of ASICs to drive Broadcom’s revenue and profits over the next several years.

“We return to AVGO as our top pick as we see the larger upside to estimates as ASICs hit an inflection point. Google has long been the main ASIC customer for AVGO but those volumes should become much more meaningful in C26/27. Google continues to see the amount of tokens they process per month rise and announced 1,300T in October up from 480T in April 2025. This should grow even more as compute is needed for multimodal models (Google noted in mid-October over 275M videos had already been made with VEO)… Beyond the upside from GOOG, we expect Meta to ramp its first true AI chip (w/ HBM) in Q326 with an OAI ASIC in Q426. We expect the OAI engagement to drive more upside given the 10GWs plans through 2029. We model $10B in C27 but that could easily scale to $40-50B per year in C28+,” Curtis opined.

Given this outlook, Curtis assigns AVGO a Buy rating with a $480 price target, suggesting 40% upside over the next year. (To watch Curtis’ track record, click here)

The broader Street is also upbeat. AVGO boasts a Strong Buy consensus based on 30 recent reviews, including 28 Buys and just 2 Holds. With shares trading at $342.65, the average price target of $398.73 implies a further 16% climb from here. (See AVGO stock forecast)

Philip Morris

The next stock on the list of ‘top picks,’ Philip Morris International, is a long-time stalwart of the tobacco industry. The company traces its roots back to 1847, and the original Philip Morris tobacco company; in 2008, it spun off from the corporate descendant, Altria, to take on the firm’s international tobacco business as an independent entity. Since then, Philip Morris International, or PMI, has become the world’s largest tobacco company when measured by market cap – it boasts a valuation of $241.9 billion – and second largest by revenue, bringing in just over $39 billion in sales from 3Q24 through 2Q25.

Among the assets supporting PMI’s success are some of the best-known cigarette brands on the global market. PMI owns the international rights to produce and market the entire line of Marlboro products, and its other brands include L&M, Chesterfield, Next, and Philip Morris. All of these are commonplace wherever cigarettes are sold. PMI has a footprint in some 170 local markets around the world, and employs over 83,000 people worldwide. That figure includes more than 1,400 R&D workers, who are developing the next generation of smokeless tobacco products.

Which brings us to the next of PMI’s pillars, smokeless tobacco. The company has learned the lessons of the tobacco industry lawsuits, and is working to develop, promote, market, and distribute smokeless products with fewer negative health effects. The company currently derives 41% of its revenues from these products, which are sold in 100 markets around the world and are consumed by an estimated 41 million customers. Since 2008, PMI has invested more than $14 billion in developing and commercializing its smoke-free lines.

Among PMI’s smokeless tobacco products are e-cigarettes, or vapes, as well as heated tobacco products and smokeless oral tobacco pouches. Prominent among these are the company’s IQOS line of heated tobacco products, and the oral tobacco pouches. IQOS uses real tobacco, unlike a vape, but where cigarettes burn the tobacco, IQOS simply heats it, avoiding the smoke and other aerosols that are associated with health risks. Turning to the oral products, PMI announced early this year that the FDA had approved its ZYN line, a set of flavored oral tobacco pouches. IQOS and ZYN are among the company’s flagship smoke-free brands.

PMI has poured a large amount of resources into developing these products in recent years, seeing them as the future of the industry, and that investment stake appears to be bearing fruit. In the 3Q25 report released last month, the company management described the smoke-free business as ‘increasingly profitable,’ and expects them to drive market expansion in the future.

The Q3 report showed total quarterly revenues for the company of $10.8 billion, up almost 10% year-over-year and some $185.6 million over the forecast. At the bottom line, the company reported a non-GAAP EPS of $2.24, up 17% from the prior year and 14 cents per share ahead of expectations.

That performance has strengthened the investment case in the eyes of Goldman Sachs analyst Bonnie Herzog, who is calling PM one of his top picks for 2026.

“We see a favorable risk/reward and limited downside as earnings compounding continues. While we continue to believe PM is a show me story regarding ZYN, and the scanner data for ZYN will remain an important litmus test for the stock, we continue to see a pathway for strong top and bottom-line growth, given the compounding effect of IQOS and opportunities with ZYN. To put it simply, there aren’t many Staples companies right now delivering (and guiding) high single-digit dollar topline growth (with volume) and impressive 13-15% dollar EPS growth,” Herzog noted.

Looking ahead, Herzog adds, “Ultimately PM is transforming into a faster growing and more profitable business – an earnings compounder with an attractive valuation. As such, we reiterate our Buy rating on PM and it remains one of our top stock ideas, as we believe it’s one of the best growth stories across broader Staples.”

That Buy rating is accompanied by a $200 price target that suggests a ~31% upside on the one-year horizon. (To watch Herzog’s track record, click here)

Overall, there are 9 recent analyst reviews on file for this stock, and the lopsided 8 to 1 split, favoring Buy over Hold, supports the Strong Buy consensus rating. PM shares are priced at $152.76 and the $185.25 average price target implies a potential one-year upside of 21%. (See PM stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.