Investors who have missed out on investing in Broadcom (NASDAQ:AVGO) may be feeling some regret as the stock price has almost quadrupled since October 2022. With the company’s shares up over 50% this year, there is a potential catalyst on the horizon. Broadcom is set to undergo a 10-for-1 stock split after the market closes on July 12, making ownership of its stock more accessible to investors and employees.
This stock split could entice more investors to buy shares at a more affordable price than the current level of around $1,740 per share, leading to increased buying pressure and potentially driving the stock price higher. While there may be other reasons to consider buying Broadcom stock before the split, such as upcoming events like Federal Reserve Chairman Jerome Powell’s speech and the release of inflation figures, the stock split itself is expected to be a significant catalyst.
Historical data from Bank of America suggests that stocks tend to rise by an average of 25% in the 12 months following a split announcement, more than double the average gain of the S&P 500 Index during the same period. Broadcom shares have already increased by nearly 17% since the announcement of the stock split on June 12, indicating the potential for further growth.
Instead of solely focusing on short-term gains, investors may benefit more by considering Broadcom’s long-term prospects, such as the increasing demand for AI accelerators the company produces. By evaluating the company’s future potential, investors can make informed decisions about whether to buy Broadcom stock before the split on July 12.
It’s essential to consider all factors before investing, including insights from Motley Fool’s Stock Advisor on the top 10 stocks for investors to buy now, with Broadcom not included in the list. The service provides a blueprint for success, including guidance on building a portfolio and regular updates on stock picks. Ultimately, investors should weigh the potential returns from Broadcom against other investment opportunities to make the best decision for their portfolio.
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https://finance.yahoo.com/news/heres-top-reason-buy-broadcom-095000985.html