Shares of Broadcom Inc (NASDAQ:AVGO) rose 2.5% to $166.22 Monday morning as the U.S. government announced its latest round of sanctions targeting China's semiconductor industry.
The Biden administration's export controls, the third such measures in three years, are expected to intensify challenges for Chinese chipmakers, which could shift demand toward alternative suppliers like Broadcom.
What To Know: Broadcom, a key player in the global semiconductor market, specializes in designing and supplying a wide array of chips, including those essential for data centers, AI applications and advanced wireless communications.
The company has a strong foothold in high-bandwidth networking chips and custom semiconductors, both of which are critical for artificial intelligence and high-performance computing. These markets could grow as Chinese firms face increasing difficulty accessing cutting-edge chipmaking technologies and components under U.S. sanctions.
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What Else: The new restrictions, which target 140 Chinese entities and cover advanced chipmaking tools and memory technologies, will likely force Chinese customers to turn to global suppliers that operate outside the sanctions’ direct impact.
Broadcom, headquartered in San Jose, California, stands to benefit as its diversified production base and robust supply chains enable it to meet rising demand.
The sanctions also expand the foreign direct product rule, curbing shipments of critical technologies to Chinese firms, further limiting China's ability to develop domestically.
With the demand for AI-driven data centers and networking infrastructure expected to surge, Broadcom's leadership in key chip markets could position it well to capitalize on the geopolitical shift.
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How To Buy AVGO Stock
By now you're likely curious about how to participate in the market for Broadcom – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.
In the the case of Broadcom, which is trading at $166.69 as of publishing time, $100 would buy you 0.6 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
According to data from Benzinga Pro, AVGO has a 52-week high of $186.42 and a 52-week low of $90.31.
