Jim Cramer shares a strong verdict on Broadcom stock for investors

Not every stock caught in a market-wide selloff deserves to be there, and Jim Cramer thinks investors are lumping one particular chipmaker in with names it does not really belong next to. His argument arrived in the middle of a genuinely rough time for AI stocks broadly, which made the timing of his pitch nearly impossible to ignore.

The backdrop was not subtle in the slightest. AI-related shares were getting hit hard across the board that day. Cramer used the moment to point out that panic selling and genuine business deterioration are two very different things, which markets frequently confuse.

Cramer says Broadcom is too cheap to be ignored

Cramer addressed the broader tech pullback during the September 14 episode of Mad Money, framing the day's carnage around growing caution from two of the industry's biggest names. "It's a tough time to come out to San Francisco, a day when the whole AI complex is getting hammered because Anthropic and OpenAI seem to be, I don't know, pulling in their horns," he said.

Rather than treating the selloff as a reason to retreat, Cramer pointed to it as an opportunity. "Actually, I think there's some real bargains in this group," he said, singling out Broadcom, the chipmaker behind custom silicon, networking equipment and infrastructure software, whose stock had fallen more than 10% over the past month.

Cramer walked through why the drop looked overdone to him. Broadcom had reported strong third quarter results in early September and issued what he called a spectacular multi-year forecast, but the guidance for the current quarter struck some investors as merely in line rather than blowout, triggering the pullback.

His closing argument leaned on the company's track record. "I think Broadcom's still on track to put up some incredible growth because they're at the heart of the AI ecosystem, because the company's never let us down in all the years my Charitable Trust has owned it," Cramer said, noting the stock sat roughly 150 points below its June high and calling it "too cheap to ignore."

The numbers behind Cramer's confidence are substantial. Broadcom's fiscal third-quarter revenue reached $29.6 billion, an 86% jump from the same period a year earlier, while AI semiconductor revenue surged 221% to $16.7 billion, now accounting for roughly 56% of total revenue, TheStreet reported.