What Was Bank of America's Big Announcement Regarding Nvidia?

Bank of America recently made a huge announcement. Analysts there are raising their price target for Nvidia to $190. We're looking at three companies working closely with Nvidia that could now see their own stocks follow a similar path thanks to AI's continued explosion.

What's Going On With Broadcom Stock?

Adam Eckert
December 18, 2024

Broadcom Inc (NASDAQ:AVGO) shares are trading lower Wednesday, pulling back from a recent surge that saw the stock join the $1 trillion club. Here’s a look at what you need to know.

What To Know: Broadcom shares have been on a tear over the past week, gaining nearly 40% since reporting earnings. Broadcom shares soared after the company beat earnings estimates and provided strong guidance for AI-related revenue growth.

Broadcom’s fourth-quarter revenue was up 51% year-over-year to $14.05 billion, but came up short of estimates of $14.09 billion, according to Benzinga Pro. Despite the miss on overall revenue, Broadcom reported a 220% increase in AI revenue and guided for significant growth in 2025. Positive commentary surrounding AI on the call also helped drive momentum to the upside.

Broadcom CEO Hock Tan said on the call with analysts and investors that he expects the total addressable market for the company’s AI chips to be between $60 billion and $90 billion over the next few years. He also announced that the company was working on custom AI chips with large cloud customers, per CNBC.

Reports from last week suggested that Broadcom was working with Apple Inc (NASDAQ:AAPL) on AI chip development. The company is reportedly working on development of an AI server chip’s networking technology. Broadcom shares got a boost from the news.

Several analysts have weighed in with positive updates since the company reported fourth-quarter results. Multiple analysts maintained Overweight ratings, while others kept Buy ratings on the name. Newly-issued price targets range from $205 to $255.

The weakness in Broadcom shares on Wednesday appears to be due to profit-taking in the wake of Broadcom’s incredible surge above the $1 trillion market cap mark. Broadcom shares hit new all-time highs this week, so the stock is likely to remain volatile as investors try to determine the appropriate value of the stock given the recent string of AI news.

It’s worth noting that Broadcom was among the top trending stocks on Reddit’s WallStreetBets on Wednesday, suggesting retail investors are also sizing up the name.

Check This Out: Broadcom Outpaces Nvidia In AI Chip Stock Valuation Race: Is Investor Sentiment Shifting?

AVGO Price Action: Broadcom shares were down 3.33% at $232.18 at the time of publication Wednesday, according to Benzinga Pro.

Photo: Shutterstock.

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