Should You Buy Broadcom (AVGO) Stock Ahead of July 12?

  • Broadcom (AVGO) will enact a 10-for-1 stock split on July 12.
  • The dynamic tech leader has enjoyed a year of steady growth.
  • Now, it is preparing for a trading frenzy as investors rush to acquire shares.
AVGO stock - Should You Buy Broadcom (AVGO) Stock Ahead of July 12?

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The next big stock split is quickly approaching. Tech sector titan Broadcom (NASDAQ:AVGO) is gearing up for a 10-for-1 stock split scheduled for July 12, 2024. Given how well AVGO stock has performed lately, it makes sense that the company would split its stock. Shares have topped $1,700 this month, due primarily to the artificial intelligence (AI) boom that has transformed markets.

Now, the dynamic tech leader is offering new investors the chance to load up on shares before new AI demand takes it back to the top. This move follows a decision from fellow AI leader Nvidia (NASDAQ:NVDA), which successfully split its stock last month.

Buy AVGO Stock Pre-Split?

So far, the summer of 2024 has seen some exciting opportunities for investors. Anyone who missed the boat on Nvidia before the launch of OpenAI’s ChatGPT turned it into one of Wall Street’s favorite stocks had the opportunity to acquire shares. Now Broadcom is opting for the same course of action, organically lowering the price of AVGO stock in a clear attempt to make it accessible to new investors.

While AVGO stock is down today, there’s no denying that it has been a consistent winner throughout the AI boom. Shares are up an impressive 94% for the year, trekking from less than $900 per share to the current price of $1733. While the AI gold rush has minted a new generation of market winners, few companies can boast of that type of growth. And once the Broadcom stock split takes effect after the close of markets on June 12, investors will see their positions increase.

Even before the company announced its stock split plans, there were plenty of reasons to bet on AVGO stock. InvestorPlace contributor Yiannis Zourmpanos recently praised the company’s top and bottom-line performances. He also provided further context, stating:

“Broadcom’s semiconductor segment also had solid growth, with revenue reaching $3.8 billion, up 44% YoY. This growth was driven by increased demand from hyperscalers for AI networking and custom accelerators. Broadcom achieved consolidated revenue of $12.5 billion, marking a 43% YoY increase. Moreover, the gross margins for its infrastructure software were notably high, at 88%. This is showcasing its ability to maintain profitability amidst revenue growth. Operating margins for infrastructure software were also solid at 60%. Hence, this indicates sharp cost management and an operational edge in the VMware integration.”

What Comes Next

Zourmpanos isn’t the only one impressed by Broadcom’s fundamentals. Out of 23 surveyed Wall Street analysts, 22 rate it as a buy and many maintain highly bullish price targets. It currently holds a strong buy consensus, putting it in the same category as Nvidia, which has been performing well after its own stock split. All this suggests that AVGO stock will start making progress after it begins trading on a split-adjusted basis.

All the same, Broadcom still trades at high levels, and it is only issuing 10 shares for every individual share held before July 12. As such, it may make sense for investors to wait to load up on AVGO stock until after the split has organically lowered its price. But regardless, this company’s future looks bright as it prepares for a split-induced trading frenzy.

On the date of publication, Samuel O’Brient held a long position in NVDA stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor held a LONG position in NVDA.

Samuel O’Brient is a Reporter for InvestorPlace, where his work focuses primarily on financial markets, global economic trends, and public policy. O’Brient writes a weekly column on recent political news that investors should be following.


Article printed from InvestorPlace Media, https://investorplace.com/2024/07/should-you-buy-broadcom-avgo-stock-ahead-of-july-12/.

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