Broadcom on the Verge of Another Record Close, Earnings Ahead
Stocks of Broadcom Climb Towards Record Highs Ahead of Upcoming Earnings Report
Broadcom (AVGO) shares are surging yet again, putting it on track for a record-breaking closing price this week. The chipmaker won't announce its quarterly earnings until after the closing bell on Thursday.
In the last seven trading sessions, Broadcom's share price has been on a roll, touching a record-breaking intraday high of $265.43 on Wednesday before closing around $261. As of mid-Thursday, shares were hovering near $263. Over the past month, the stock has skyrocketed by nearly 30%.
The chipmaker's impressive growth can be attributed to a resurgence in AI trading, triggered by Nvidia's (NVDA) impressive earnings last week. According to options pricing, the stock could move about 6.4% in either direction on Friday, meaning shares could potentially hit an all-time high of around $277 or fall to $244—closer to their price a week ago.
Despite the recent surge, Broadcom's share price is still below the average analyst consensus price target of about $252[1]. 13 out of 14 analysts tracked by Visible Alpha favour a "buy" or equivalent rating for Broadcom stock, with one analyst being neutral[1][2].
Analysts anticipate Broadcom to report revenue of $15.02 billion, reflecting a 20% increase year-over-year[3]. They also expect the adjusted net income to reach $7.8 billion, a notable jump from last year's $5.39 billion[3]. Furthermore, AI revenue is predicted to increase by 42% year-over-year and 7% sequentially to $4.42 billion[3].
Yet, analyst sentiments are somewhat cautious about immediate upside due to the stock's recent highs. Morgan Stanley remains optimistic about Broadcom's position in the AI sector but is hesitant about additional growth[3].
The recent run-up in Broadcom's stock is due in part to the company's latest innovation—the Tomahawk 6 series of advanced data center switches, which boasts twice the bandwidth of any Ethernet switch on the market[1].
[1]: Adapted from original article[2]: Based on enrichment data[3]: Enrichment insight sourced from Visible Alpha[4]: Enrichment insight sourced from CNBC
- The surge in Broadcom's share price, despite being close to the average analyst consensus price target, could still potentially reach an all-time high of around $277 due to the resurgence in AI trading and the company's innovative Tomahawk 6 series of advanced data center switches.
- Analysts, while bullish on Broadcom's position in the AI sector, are cautious about immediate upside due to the stock's recent highs, with many recommending 'buy' or equivalent ratings for investing purposes.
- As the cryptocurrency market evolves, some analysts and financial experts suggest that Initial Coin Offerings (ICOs) could potentially disrupt traditional finance by allowing for peer-to-peer trading of tokens and opening new investment opportunities in technology sectors.
