Justin Sullivan/Getty Images
Key learning points
-
Shares of Broadcom continue to rise, setting a new all-time intraday high on Monday.
-
Shares have soared since last week’s quarterly earnings call and the announcement of a 10-for-1 stock split.
-
A number of major companies have announced splits in recent months, including Walmart, Chipotle Mexican Grill and Nvidia.
Shares of semiconductor maker Broadcom (AVGO) continued to rise on Monday, hitting a new all-time high and extending an extension that began with last week’s earnings report, which included the announcement of a 10-for-1 stock split effective next month would become.
Shares of Broadcom have soared over the past year as it benefited from an artificial intelligence (AI)-based stock market boom. Analysts have expressed optimism about Broadcom’s business prospects in recent months, calling the company a “top 2 AI pick” for its ability to make custom AI chips.
Last week’s gains and the announcement of a stock split are driving gains
A number of analysts have raised their price targets for the company following last week’s earnings report, saying the company is a “critical part” of the AI ​​industry’s growth, along with other tech heavyweights like Nvidia (NVDA) and Alphabet’s (GOOG) Google. .
AI-related revenues represented about a quarter of Broadcom’s $12.49 billion in revenue for the second quarter, and the company also increased its revenue targets for the full fiscal year.
Broadcom’s shares will be split after markets close on July 12, with registered shareholders receiving nine additional Broadcom shares for each share they own on July 11.
Companies pursue stock splits for a variety of reasons, as this move is a way to issue more shares without affecting the company’s overall valuation. The split lowers a company’s stock price, which can improve liquidity by increasing trading activity.
Several other major companies, including Chipotle Mexican Grill (CMG), Nvidia and Walmart (WMT), have announced stock splits in recent months.
Shares are up more than 60% through 2024.
Read the original article on Investopedia.
