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NEW YORK (dpa-AFX) – Broadcom broke the $1 trillion mark in market value for the first time on Friday. The exclusive “trillionaires club” now includes eight companies, including Broadcom.
With a peak of $228.70, shares of the semiconductor company rose well above the $200 mark again after the stock split in the summer. At the end of trading they had gained almost a quarter at a price of $224.80. The decisive factors for this were good business figures and a strong outlook. Broadcom benefited significantly from the booming topic of artificial intelligence (AI) in the last financial year. Growth is expected to accelerate even further in the current quarter.
In just one day, Broadcom increased its market capitalization by around $206 billion. This is one of the highest gains in absolute value in stock market history. Broadcom shares have more than doubled since the beginning of the year. This makes them among the strongest stocks in the technology-heavy selection index NASDAQ 100.
The undisputed leader in the Nasdaq 100 remains the shares of the AI high-flyer NVIDIA, up 171 percent since the beginning of the year, although they did not benefit from the Broadcom hype on Friday and closed 2.3 weaker.
Apple leads the list of the world’s most valuable companies with a market capitalization of $3.75 trillion, followed by NVIDIA with $3.33 trillion and Microsoft just behind. This is followed by the Internet giant Amazon, Google parent company Alphabet (Alphabet A (ex Google)), the social media holding Meta (Meta Platforms (ex Facebook)) (Facebook, Instagram, WhatsApp) and Tesla. With US investor legend Warren Buffett’s investment company Berkshire Hathaway, another company is lurking to join the “trillionaires’ club”.
On Thursday after US trading closed, Broadcom reported a significant increase in sales and operating earnings (adjusted Ebitda) for the past 2023/24 financial year and excited investors with the outlook. Like Nvidia, the company benefits from the AI boom and high investments by tech companies in data centers. These are necessary in order to be able to process the flood of data required for large AI language models and to build new business models based on AI.
In this context, Broadcom boss Hock Tan also said that two new “hyperscaler customers” had been acquired. This refers to the largest operators of data and server centers as well as cloud providers.
Several analysts attested to Broadcom’s solid figures and a decent outlook. In response, they raised their price targets for Broadcom shares – the experts at JPMorgan, Bernstein Research and Bank of America to $250 and those at Deutsche Bank Research and UBS to $240 and $220 respectively.
For JPMorgan’s Harlan Sur, Broadcom remains the semiconductor favorite. The core business should have bottomed out and is in a good starting position for the coming year, added Bernstein expert Stacy Rasgon. He praised the software business, the outstanding margins and cash inflows and the support from AI. According to UBS’s Timothy Arcuri, there is nothing wrong with the company’s business performance. Both the numbers and the outlook were better than many investors feared./ajx/gl/ag/jha/nas
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