Artificial intelligence-chip maker Broadcom is a standout at a time when companies of all stripes are struggling to recover from the recent market retreat. On Wednesday, the Relative Strength (RS) Rating for Broadcom stock got an upgrade from 88 to 91.
Magnificent Seven stock Nvidia is the king of AI processors that run systems implementing artificial intelligence. But Broadcom is a leader in custom chips that companies also need to implement all the power that AI brings to data centers, networks and even connected devices like smartphones.
Broadcom Among Top 9% Of Stocks
The upgraded 91 RS Rating shows that Broadcom is among the top 9% of stocks for price performance over the past year. Market research shows that the market's biggest winners typically have an RS Rating of over 80 at the beginning of a new climb.
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Broadcom stock is working on a consolidation with a 185.16 entry. That is also its all-time intraday high, set on June 18. As it consolidated after the new high, Broadcom dropped to 128.50 on Aug. 5. It turned up then and traded around 155 Wednesday afternoon, up nearly 5% for the day and more than 13% for the week.
See if Broadcom stock can clear the breakout price in heavy trade. Keep in mind that it's a later-stage consolidation. Those can perform well but entail more risk than earlier stage patterns.
Earnings grew 18% last quarter to $1.24 per share, up from 7% growth in the prior report. Revenue growth rose every quarter over the past year. Last quarter Broadcom reported a 47% jump to $13.07 billion. In the prior three stanzas Broadcom's sales grew 4%, 34% and 43%.
Revenue Seen Popping 51% This Quarter
Consensus of analysts polled by FactSet is for earnings to rise 26% this quarter on a 51% leap in revenue.
Palo Alto, Calif.-based Broadcom has a strong 92 EPS Rating out of 99 and an even stronger 94 Composite Rating, a rating that combines IBD's five other key ratings. The best growth stocks typically have a 90 or higher Composite.
Broadcom stock earns the No. 2 rank among its peers in the Electronics-Semiconductor Fabless industry group. Cirrus Logic is the top-ranked stock in the group.
IBD's unique Relative Strength Rating measures market leadership with a 1 (worst) to 99 (best) score. The score shows how a stock's price movement over the trailing 52 weeks compares to all the other stocks in our database.
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