Broadcom Soars Over 20% as AI Opportunities Ignite Stock Surge
Broadcom Inc. AVGO jumped more than 20% during morning trading on Friday, reaching new highs after its fiscal fourth-quarter earnings surpassed Wall Street forecasts.
The company’s growth is significantly driven by a robust artificial intelligence (AI) market, with analysts expecting substantial revenue increases in the coming years.
This significant rise in stock price has propelled Broadcom into the prestigious trillion-dollar market cap club, making it the eighth-largest publicly traded company, just behind Tesla Inc. TSLA.
To put this into perspective, the trillion-dollar bracket is exclusive territory, predominantly occupied by the “Magnificent Seven” tech giants.
Broadcom: The New Player in the Tech Elite?
| Name | Market Cap |
| Apple Inc. AAPL | $3.73 trillion |
| Microsoft Corporation MSFT | $3.33 trillion |
| NVIDIA Corporation NVDA | $3.31 trillion |
| Amazon.com, Inc. AMZN | $2.39 trillion |
| Alphabet Inc. GOOG GOOGL | $2.35 trillion |
| Meta Platforms, Inc. META | $1.57 trillion |
| Tesla, Inc. | $1.37 trillion |
| Broadcom Inc. | $1.02 trillion |
A Stellar December: Broadcom Sets Sights on Record Month
Thanks to Friday’s jump, Broadcom’s stock has surged 33% in December, marking its most outstanding monthly performance since its public listing in 2009.
Year-to-date, Broadcom has climbed an impressive 95%, securing its place as the 10th-best-performing stock in the S&P 500 for 2024 thus far.
When combining returns for 2023 and 2024, Broadcom ranks seventh in the index.
Read Also: Nvidia, AMD, Taiwan Semi Gain As Broadcom’s Q4 Performance Sparks Sector-Wide Surge
| Name | Price Change % (YTD 2024) | Total Return (2023) | Combined Gains |
|---|---|---|---|
| Palantir Technologies Inc. PLTR | 325.31% | 167.45% | 1,112.89% |
| NVIDIA Corporation | 173.24% | 239.02% | 639.72% |
| Vistra Corp. VST | 279.37% | 70.73% | 508.67% |
| Meta Platforms, Inc. | 75.99% | 194.13% | 341.37% |
| Royal Caribbean Cruises Ltd. RCL | 88.63% | 161.97% | 371.64% |
| Super Micro Computer, Inc. SMCI | 26.46% | 246.24% | 324.29% |
| Broadcom Inc. | 94.99% | 104.18% | 296.19% |
| Axon Enterprise, Inc. AXON | 147.91% | 55.69% | 289.91% |
| Fair Isaac Corporation FICO | 88.05% | 94.46% | 292.80% |
| Arista Networks Inc ANET | 87.89% | 94.07% | 291.65% |
Why Analysts Are Bullish on Broadcom
Analyst Vivek Arya from Bank of America maintained a “Buy” rating on Broadcom following the recent quarterly report, increasing the 12-month price target from $215 to $250, which suggests a potential 15% upside from current prices.
The strong outlook is attributed to three key factors:
- Growing AI Demand: Broadcom’s custom AI chips (ASICs) now cater to five major clients, a rise from three. The company’s AI-related revenue is expected to reach a market of $60–$90 billion by 2027—up from an estimated $15–$20 billion in 2023.
- Strong Ties with Apple: Broadcom is anticipated to maintain its robust partnership with Apple, despite previous worries about decreasing orders.
- Consistent Earnings Growth: Analysts predict a 15% sales growth and a 20% increase in adjusted earnings-per-share (EPS) through 2026, supported by Broadcom’s diverse offerings in silicon and infrastructure software.
“Broadcom’s AI-driven potential and its broad base position it as an excellent opportunity in the chip industry,” Arya noted, justifying an upward revision of earnings per share projections for 2025 and 2026 by 5% and 3%, respectively.
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