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Broadcom Inc. (AVGO), headquartered in Palo Alto, California, is a global technology leader that designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor-based devices and analog III-V based products. With a market cap of $998.1 billion, the company offers storage adapters, controllers, networking processors, motion control encoders, and optical sensors, as well as infrastructure and security software to modernize, optimize, and secure the most complex hybrid environments.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and AVGO definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the semiconductors industry. Broadcom maintains a strong focus on strategic areas, including cloud computing, data centers, networking, broadband, and wireless communications, positioning itself as a key enabler of the 5G and AI transformations.
Despite its notable strength, Broadcom slipped 21.5% from its 52-week high of $251.88, achieved on Dec. 16, 2024. Over the past three months, AVGO stock gained 23.9%, outperforming the Dow Jones Industrials Average’s ($DOWI)3.3% losses during the same time frame.
In the longer term, shares of Broadcom climbed 52.6% over the past 52 weeks, outperforming DOWI’s 11% returns over the last year. However, AVGO declined 14.7% on a YTD basis, underperforming DOWI’s YTD gains of 1.6%.
To confirm the bullish trend, AVGO is trading above its 200-day moving average over the past year. However, the stock has been trading below its 50-day moving average recently.
Broadcom's AI revenue has surged over 220% in 2024, reaching $12.2 billion. CEO Hock Tan foresees a massive AI opportunity over the next three years. The company has unveiled its PCIe Gen 6 portfolio, offering early access to its Interop Development Platform, simplifying system design. Additionally, collaborating with industry leaders like Micron Technology, Inc. (MU) and Teledyne LeCroy, Broadcom ensures fully validated PCIe Gen 6 building blocks for AI platforms. This commitment to open ecosystem and scalable solutions positions Broadcom as a leader in transitioning from PCIe 5 to PCIe 6.
On Dec. 12, AVGO reported its Q4 results, and its shares closed up more than 24% in the following trading session. Its adjusted EPS of $1.42 surpassed Wall Street expectations of $1.39. The company’s revenue was $14.05 billion, missing Wall Street forecasts of $14.06 billion. For Q1, Broadcom expects revenue to be $14.6 billion.
Broadcom’s rival, Advanced Micro Devices, Inc. (AMD) shares lagged behind the stock, with a 17.6% dip on a YTD basis and a 44.1% loss over the past 52 weeks.
Wall Street analysts are bullish on AVGO’s prospects. The stock has a consensus “Strong Buy” rating from the 33 analysts covering it, and the mean price target of $249.83 suggests a potential upside of 26.3% from current price levels.
