American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Broadcom stock nears key price; could hit $1 trillion valuation soon

by admin October 9, 2024
October 9, 2024
Broadcom stock nears key price; could hit $1 trillion valuation soon

Broadcom (AVGO) stock price is firing on all cylinders as the company matches towards a $1 trillion market cap. It has risen by over 61% this year, pushing its market cap to over $817 billion. 

As such, it needs to rise by 22.38% to $220 to get to a trillion-dollar valuation, which is possible if the current momentum continues. 

Broadcom and the AI opportunity

Broadcom is a large technology company with a presence across various sub-sectors. It is a leading player in the semiconductor industry, where it offers broadband, networking, wireless, storage, and industrial solutions. 

Broadcom is not as popular as other chip companies like Intel, AMD, and Nvidia, because people rarely interact with its semiconductor products. However, most people use its solutions through its clients like Apple, Samsung, Google, and Amazon.

A key solution that Broadcom makes in this segment is its Tomahawk chip, which is set to increase broadband to 102.4 Tbps, double that of the last generation. These chips are also significantly faster than those made by companies like Cisco and Marvell.

It is also a big player in the software industry through its Brocade, CA Technologies, an Symantec. 

All these businesses, and its substantial market share, have made Broadcom to be one of the biggest companies globally. Its business is also growing substantially in the past few years, with the total revenue rising from $22.6 billion in 2019 to $46 billion in the trailing twelve months.

Some of this growth was organic while most of it was through acquisitions. The most recent mega buyout was VMware, a top company in the virtualization industry, in a $30.8 billion deal.

Before that, it bought Symantec in a $10 billion deal, CA Technologies for $18.9 billion and Brocade for $5.5 billion. These buyouts have helped it become one of the biggest players in the software industry. 

Read more: Broadcom stock has turned $1,000 into $9,000 in 4 years: what’s next?

Broadcom’s growth has continued

The most recent financial results showed that Brodcom’s revenue soared to $13 billion, a 47% annual increase. While the company had organic growth, most of this performance was because of its VMware business. 

Most of this revenue, or $7.2 billion, came from its semiconductor segment, which made $7.27 billion. Infrastructure software made over $5.7 billion. Also, its free cash flow rose to over $4.79 billion.

Broadcom estimated that its fourth-quarter revenue would rise by $1 billion to over $14 billion.

Analysts believe that Broadcom has room to grow its business, especially in this era of artificial intelligence. The average estimate is that its revenue will be $14.04 billion, slightly higher than the company’s forecast. 

Broadcom has a good record of doing better than estimates. Most recently, its earnings were better than estimates in the last three consecutive quarters.

Read more: Broadcom stock analysis: AVGO could hit a $1 trillion valuation

AVGO valuation concerns

Analysts expect that Broadcom’s annual revenue will grow by 44% to $51.6 billion followed by $64 billion in the next financial year. 

Some analysts, including this, expect that Broadcom’s annual revenue will remain in the double digits in the next few years. He expects that its annual revenue will be over $145 billion by 2030 and $184 billion by 2033. 

If these numbers are accurate, and if Broadcom’s net income margin grows from the current 10.8% to 15% by then, it means that its annual profit will be over $27.6 billion, a big increase from the $14 billion it made in the last financial year. 

Broadcom trades at a non-GAAP price-to-earnings (P/E) ratio of 38.56, which is substantially higher than the industry median of 23. Its forward P/E multiple of 36 is also higher than the industry median of 23. 

Also, these metrics are significantly higher than the five-year average of 20.3 and 18.7, respectively. These numbers mean that the company will need to continue executing well in the coming years. 

Broadcom is also popular because of its dividends, which it has boosted by over 14% in the last five years. It has a dividend yield of 1.2% and a payout multiple of 46%. Also, the company has grown its payouts in the last 13 years, making it a potential future dividend aristocrat.

Broadcom stock price analysis

AVGO chart by TradingView

The daily chart shows that the AVGO stock price has been in a strong bull run in the past few months. It has risen above the key resistance point at $170.9, its highest point on August 22. 

The stock has moved above the 50-day and 100-day Exponential Moving Averages (EMA). Also, the Relative Strength Index (RSI), Stochastic Oscillator, and the MACD indicators have moved upwards. 

Therefore, a move above the key resistance point at $184.20, its highest point in June this year. A move above that level will invalidate the double-top pattern, and point to more gains. If this happens, the Broadcom share price will likely continue rising as bulls target the key resistance at $220, pushing its market cap to over $1 trillion.

The post Broadcom stock nears key price; could hit $1 trillion valuation soon appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Rio Tinto to acquire US lithium producer Arcadium in a $6.7 billion deal
next post
Sensex surges 500 points, Nifty gains as RBI shifts policy; bank stocks rally, Torrent Power hits record high

Related Posts

Why is Trump calling for a repeal of...

March 5, 2025

Tim Noel appointed as UnitedHealthcare CEO: key details...

January 24, 2025

Analysis: as Adani battles charges and stocks remain...

November 22, 2024

TSLY and NVDY ETFs brace for key events:...

October 8, 2024

Meta resumes AI training using public social media...

September 14, 2024

Shaking seats and piped-in fog: How 4DX is...

May 30, 2024

Is ServiceNow stock a buy or a sell...

April 18, 2025

T-Mobile stock analysis: short-term pullback can’t be ruled...

October 6, 2024

How are the Dow Jones index stocks fairing...

April 21, 2025

How Bitcoin ETFs helped disrupt traditional finance in...

December 31, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • GMS stock jumps 29% on takeover interest from Home Depot, QXO, analysts raise PTs

      June 22, 2025
    • Japan’s rice price surge: what’s driving it and why it could spark a political crisis

      June 22, 2025
    • BofA raises STOXX 600 target amid resilient global growth, warns on Mideast risks

      June 22, 2025
    • Palantir co-founder: US must prevent Iranian nukes

      June 22, 2025
    • Fed governor Waller advocates for July rate cut amid tariff, labor market outlook

      June 21, 2025

    Categories

    • Business (3,199)
    • Investing (2,531)
    • Latest News (2,000)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved