Broadcom is the IBD Stock Of The Day as it sets up multiple buy points following the recent stock market correction. AVGO stock rose on Friday.
Broadcom stock has been trending sideways since its earnings report on March 3. AVGO stock has been consolidating for the past 11 weeks and has a buy point of 677.86, according to IBD MarketSmith charts.
That official buy point is 10 cents above the all-time high for AVGO stock of 677.76, reached on Dec. 28. However, IBD analysis points to a possible early-entry buy point of 614.74, if it surpasses a recent high.
On the stock market today, AVGO stock rose 1.3% to close at 610.41.
Forecasting Accelerating Sales Growth
The San Jose, Calif.-based chipmaker forecast accelerating sales growth in the current quarter when it delivered a beat-and-raise report for its fiscal first quarter. AVGO stock climbed 3% the day after the earnings news.
Broadcom earned an adjusted $8.39 a share, up 27% year over year, on sales of $7.71 billion, up 16%, in the quarter ended Jan. 30.
For its fiscal second quarter ending May 1, Broadcom predicted sales of $7.9 billion, up 20% year over year.
Broadcom makes wireless chips for smartphones. It also makes semiconductors for broadband communications, networking, storage and industrial applications. Plus, Broadcom has a growing business in infrastructure software for mainframes, data centers and cybersecurity.
Semiconductor products accounted for 76% of Broadcom's revenue in the first quarter. Infrastructure software contributed 24% of sales.
AVGO Stock Ranks Third In Industry Group
Piper Sandler analyst Harsh Kumar rates Broadcom stock as overweight, or buy, with a price target of 750.
"Broadcom is benefiting from upgrades in several of its end markets, including hyperscale, cloud, enterprise, wireless, and storage," Kumar said in a recent note to clients. "At a broad level, demand and orders appear to be extending into the first half of calendar 2023."
AVGO stock ranks third out of 30 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 96 out of 99. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
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