Artificial intelligence (AI) has been a driving force behind the revenue and stock price growth of many technology companies recently. Investors are showing interest in companies benefiting from the current AI boom and potential future gains, as analysts believe the $200 billion AI market could reach $1 trillion by the end of the decade.
Broadcom, a semiconductor and networking giant, has seen its stock price soar over 60% this year due to increased demand. However, the company recently announced a stock split that will lower its share price from over $1,800 to around $180, raising the question of whether to buy Broadcom now or wait until after the split.
Broadcom produces a wide range of semiconductor and infrastructure software products and recently completed the acquisition of cloud computing software company VMware. In the most recent quarter, the company reported a 43% increase in revenue to over $12 billion, with AI revenue growing by 280% to $3.1 billion. Thanks to strong performance and demand for AI technologies, Broadcom raised its full-year revenue forecast to $51 billion, representing a 42% increase over the previous year.
The stock split, planned for mid-July, will be a 10-for-1 split, lowering the share price without affecting the company’s overall market value. While the split may make purchasing full shares easier for some investors, buying before or after the split depends on individual circumstances. Despite the stock’s recent rise, Broadcom’s AI growth and VMware’s contributions make the current price reasonable.
Investing for the long term means focusing on the stock’s performance over several years rather than short-term fluctuations. If budget constraints aren’t an issue, buying now could be a good move for those interested in investing in this AI-driven company. The decision whether to invest in Broadcom now or after the split should be based on individual preferences and financial situations.
Keep in mind that the Motley Fool’s Stock Advisor service, which has identified 10 top stocks to invest in, did not include Broadcom on its list. Investors should weigh all factors and potential risks before making a decision.
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https://finance.yahoo.com/news/buy-broadcom-now-stock-split-081500083.html