Several companies have recently announced stock splits this year, including Broadcom (NASDAQ:AVGO). The stock split, scheduled for July 12, will be a 10-for-1 split, aimed at making it easier for a broader range of investors to buy the stock. Broadcom has seen a significant increase in its stock price due to the rise of artificial intelligence (AI) and strong demand for its custom AI networks and accelerators.
Investors may be wondering whether to buy shares before or after the split. Buying before the split could be beneficial if you believe in Broadcom’s long-term potential, as the split does not fundamentally change the company or stock valuation. This was evident in Nvidia’s case, where the stock price rose by almost 30% between the split announcement and the actual event.
Broadcom has shown promising growth potential, thanks to the AI boom and its recent acquisition of VMware. With revenue rising 43% in its most recent fiscal quarter, Broadcom expects significant growth in its AI revenue by 2024. The company also anticipates success from the integration of VMware, with revenue expected to reach $4 billion.
On the other hand, buying shares after the split could be advantageous for investors looking to purchase a lower-priced stock. This would make investing in Broadcom more accessible to those planning to invest less than the current share price without relying on fractional shares.
The key factor in deciding when to invest in Broadcom lies in the available funds for investment. If you plan to invest the same amount as Broadcom’s current share price or more, it may be beneficial to buy before the split. On the other hand, if you plan to invest less than the current share price, it might be better to wait until after the split to access the full shares more easily.
Ultimately, the decision to invest before or after the split should be based on individual investment goals and strategies. Timing the market perfectly is challenging, so focusing on a strong company with growth potential could lead to attractive returns over the long term. Regardless of the timing, Broadcom’s position as a major AI player makes it a compelling buy for investors looking to capitalize on AI growth.
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