Broadcom Stock Tests Fresh Record High
Broadcom stock (AVGO) is poised to build on last week’s run to record heights.
Broadcom said it plans a 10-for-1 stock split in an effort to make its shares more affordable for investors and employees, following peers whose shares have also jumped.
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Broadcom stock (AVGO) is poised to build on last week's run to record heights, via @FactSet #boradcom #chips #stocks pic.twitter.com/dUXmuhEMPY
— The_Journalbiz (@the_journalbiz) June 17, 2024
Factset chart, Broadcom
The chip and software maker’s stock has grown more expensive as surging demand for artificial intelligence-related products buoy shares. Broadcom reported another quarter of strong demand on Wednesday, with about one-quarter of its sales coming from AI products.
Shares in Broadcom rose a further 13% to $1,696 in extended trading after the news. The stock is up about 69% since the start of the year, and closed Wednesday at a record.
The company said the split would take effect through an amendment to its certificate of incorporation. Each holder of Broadcom will get nine more shares for every share they own.
Stock splits on expensive stocks are a good sign for share performance. Average returns a year after companies announce stock splits are 25%, Bank of America analysts said in a recent note, well above the 12% average return for the S&P 500.
The shares surged last week, aided by news that the chip and software company planned a stock split. So far this year, they are up about 55%. In morning trading, the stock was more than 3% higher, approaching $1,800 a share.
