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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 $757 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 is deeply focused on key areas like cloud computing, data centers, networking, broadband, and wireless communications, making it a significant player in the advancement of 5G and AI revolution.
Despite its notable strength, Broadcom slipped 10.7% from its 52-week high of $186.42, achieved on Oct. 9. Over the past three months, AVGO stock gained 2.3%, underperforming the Nasdaq Composite’s ($NASX)9.5% gains during the same time frame.
In the longer term, shares of Broadcom rose 49.2% on a YTD basis and climbed 79% over the past 52 weeks, outperforming NASX’s YTD gains of 29.3% and 35.6% returns over the last year.
To confirm the bullish trend, AVGO has traded above its 200-day moving average over the past year. However, the stock is trading below its 50-day moving average since mid-November.
Broadcom's strong performance can be attributed to its thriving AI semiconductor solutions and the successful integration of VMware that expanded AVGO's hybrid cloud portfolio and accelerated app delivery.
On Sep. 5, AVGO shares closed down marginally after reporting its Q3 results. Its adjusted EPS of $1.24 surpassed Wall Street expectations of $1.20. The company’s revenue was $13.1 billion, topping Wall Street forecasts of $12.9 billion. For Q4, Broadcom expects revenue to be $14 billion.
Broadcom’s rival, Advanced Micro Devices, Inc. (AMD) shares lagged behind the stock, with a 3.6% dip on a YTD basis and a 17% gain 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 $195.71 suggests a potential upside of 17.5% from current price levels.
