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We're talking about custom chipmaker Broadcom , which analysts at Piper called the "ASIC compute king" in a new note to clients. ASIC stands for application-specific integrated circuit. They set a $460 price target on the stock, representing more than 25% upside from current levels. "AVGO is the leader in ASIC chips (75% share) for AI inference, with most hyperscalers and AI Labs having an ASIC co-design relationship with them," the analysts wrote. They cited Alphabet 's Google TPUs (tensor processing units) as the current "volume shipper," and noted its expanded deal with Anthropic for next-generation TPUs. They were also encouraged by Broadcom's ramp-up of Meta Platforms' so-called MTIAs, or Meta training and inference accelerators, and OpenAI's Jalapeno chips. Broadcom detailed its relationships with all three companies earlier this month when it released better-than-expected quarterly earnings per share (EPS) and revenue and provided a strong multiyear sales forecast for its AI custom chip business. The stock fell nearly 3% Sept. 3, a day after its earnings release. Investors were focused more on the nearer term and a disappointing fiscal 2027 guide that management blamed on supply constraints. Those concerns, coupled with questions about the longer-term impact of Alphabet's recent deal with Broadcom's custom-chip rival Marvell, are giving Jim caution. "What's my least favorite tech? That's Broadcom, which is why we trimmed it so aggressively going into the quarter," Jim said during Thursday's September Monthly Meeting . "I know the company made some bold predictions on last week's earnings call, and that's what's keeping us from selling the rest of the stock. It also kept the stock from plummeting." Following the quarter, we reiterated our hold-equivalent 2 rating but lowered our price target to $430 per share from $480. Broadcom stock has struggled this year, with 2026 gains of less than half of the S & P 500 's nearly 11% advance. Piper analysts argue that worries about ASIC market share loss to Marvell and other rivals, such as MediaTek and Arm Holdings , are "overdone." They also like Broadcom's networking business, which accounts for 30% of AI chip revenue. "Given AVGO's outsized networking share, driven by its Tomahawk switch and Jericho chips, the firm is ideally positioned to cross-sell its networking products along with its ASIC compute sales." We're not as convinced that competitive concerns should be dismissed. Additionally, Jim said the increasing politicization of the AI buildout has complicated the outlook for stocks like Broadcom, whose growth is linked to data center expansion and execution. "We know we have too much data center exposure ... especially if we get too much political blowback on the subject." He added that the Club is working hard to minimize risk. (Jim Cramer's Charitable Trust is long AVGO. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. 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