Broadcom (NASDAQ:AVGO) investors are eagerly anticipating the company’s upcoming 10-for-1 stock split, following in the footsteps of companies like Nvidia and Chipotle Mexican Grill. Stock splits, like the one announced by Broadcom, are a way to reduce the price of individual shares to make them more accessible to a wider range of investors.
Broadcom’s stock has soared in recent years, with a 500% increase in the past five years, leading to a share price of over $1,700. The company has seen increased profits due to growing demand for artificial intelligence (AI) products.
The upcoming stock split will see shareholders receive nine new shares for every one they currently own. The split, set to take place on July 12, will help make investing in Broadcom more accessible to a larger audience. While the split may make the stock more attractive to some investors, it is important to note that it is a mechanical operation and does not change the fundamental value of the company.
Despite the stock split, investors should consider Broadcom’s earnings history, future prospects, and stock valuation before deciding to invest. The company’s strong growth, particularly in AI and its recent acquisition of VMware, make it an attractive long-term investment. Additionally, Broadcom’s stock is trading at a reasonable valuation, making it a potentially sound investment opportunity.
While the stock split itself may not be a major catalyst for share price performance, Broadcom remains a solid stock to consider buying and holding for the long term. The Motley Fool’s Stock Advisor service has identified Broadcom as a strong investment opportunity, along with nine other top stocks for investors to consider. Investors looking for potential outsized returns should consider evaluating Broadcom before the upcoming stock split on July 12.
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