What Happened?
Shares of fabless chip and software maker Broadcom (NASDAQ:AVGO) jumped 9.8% in the morning session after the stock continued its positive momentum following stellar earnings results the previous week. Wall Street analysts have also turned more bullish, with Goldman Sachs reaffirming its Buy rating. In its research note, the firm highlighted, "We continue to see the company as a pivotal enabler of generative AI.".
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What The Market Is Telling Us
Broadcom’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 5.5% after reports revealed that the company is collaborating with Apple, the maker of the iPhone, to create its first server chip specifically designed for artificial intelligence tasks. The news highlights the growing trend of tech giants shifting to in-house chip manufacturing. It also showcases Broadcom's expertise in AI chip design, potentially drawing more attention to the company alongside rivals like Nvidia and AMD.
Broadcom is up 123% since the beginning of the year, and at $242.12 per share, has set a new 52-week high. Investors who bought $1,000 worth of Broadcom’s shares 5 years ago would now be looking at an investment worth $7,494.
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