Broadcom (AVGO), the prominent semiconductor manufacturer, saw its shares climb to a new record high on Monday, continuing an upward trend that began with last week’s earnings report. This report also revealed a forthcoming 10-for-1 stock split, scheduled to take effect next month.
Over the past year, Broadcom’s shares have experienced significant gains, buoyed by a surge in artificial intelligence (AI)-related investments across the stock market. Analysts have expressed strong confidence in Broadcom’s future, frequently identifying it as a “top 2 AI pick” due to its expertise in producing custom AI chips.
Last week’s earnings report prompted several analysts to raise their price targets for Broadcom. They emphasized the company’s crucial role in the burgeoning AI industry, alongside tech giants such as Nvidia (NVDA) and Alphabet’s (GOOGL) Google.
During the second quarter, AI-related revenue accounted for approximately 25% of Broadcom’s $12.49 billion in revenue. The company also revised its revenue projections for the entire fiscal year upward, reflecting its robust performance and growth potential in the AI sector.
The planned stock split, set to occur after markets close on July 12, will see shareholders of record on July 11 receive nine additional shares for each share they currently hold. Companies typically initiate stock splits to increase the number of shares without altering overall valuation, making shares more accessible and potentially boosting trading activity. Recently, other major corporations such as Chipotle Mexican Grill (CMG), Nvidia, and Walmart (WMT) have also announced stock splits.
As of 12:30 p.m. ET on Monday, Broadcom’s stock was on track for its seventh consecutive session of gains, rising 4.3% to $1,809.09. The stock has surged over 60% in 2024 alone.
Source: Investopedia
