Broadcom Inc. (NASDAQ: AVGO), a leading provider of semiconductors, enterprise software, and security solutions, has experienced a significant increase in its stock price this year, with shares rising over 35%, aligning with the growth seen by competitor Lam Research (NASDAQ: LRCX). Following the release of its second-quarter fiscal 2024 results, Broadcom reported revenue of $12.5 billion and earnings of $10.96 per share, surpassing Street estimates. The company’s outlook for 2025 also exceeded expectations, with sales projected to increase by 42% to $51 billion and EBITDA to be 61% of sales. Additionally, Broadcom announced a ten-for-one forward stock split that is set to be completed next month, leading to a 12% increase in AVGO stock in after-market hours on June 13.
The impressive performance of AVGO stock over the past few years includes a significant gain of 240% from early January 2021 to its current level of around $1495. This outperformance has been consistent, with AVGO stock surpassing the S&P 500 by delivering returns of 52% in 2021, -16% in 2022, and 100% in 2023. Despite the challenging market conditions for individual stocks and other tech giants, Broadcom has continued to excel, highlighting the strength and resilience of the company.
In comparison to the uncertain macroeconomic environment with increased oil prices and high interest rates, AVGO stock is currently trading at 15x prior earnings, higher than the three-year average of 11x. However, the stock is expected to reach higher levels in response to its strong Q2 performance and positive full-year outlook. Additionally, the stock split announcement is likely to boost demand from smaller investors, leading to a potential increase in stock price.
Although AVGO stock is poised for further growth in the near term, it is essential to consider how Broadcom’s performance compares to its peers. By utilizing peer comparisons and evaluating AVGO’s performance against the Trefis enhanced portfolio, investors can gain valuable insights into the company’s standing within the industry. Overall, Broadcom’s strong financial results, outlook, and stock split announcement indicate a positive trajectory for AVGO stock in the coming months.
Article Source
https://www.forbes.com/sites/greatspeculations/2024/06/13/will-broadcom-stock-continue-to-see-higher-levels-after-a-35-rise-this-year/
