Following NVIDIA’s (NASDAQ:NVDA) 10-for-1 stock split, another chipmaker is stepping into the spotlight with a stock split of its own. Yesterday, semiconductor and infrastructure software solutions provider Broadcom (NASDAQ:AVGO) announced a 10-for-1 stock split alongside its second-quarter results. The stock is up by a massive 14% in the premarket session today, and top Wall Street analysts are weighing in on the action.
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Broadcom’s Solid Q2
Broadcom’s Q2 earnings beat expectations for the ninth consecutive quarter. The company’s sales rose by 43% year-over-year. Importantly, the company’s AI revenue jumped by 280% over the prior year to $3.1 billion.
AVGO’s Stock Split
The cherry on the cake was its 10-for-1 forward stock split. The record date for the stock split is set for July 11, and the stock is expected to begin trading on a split-adjusted basis on July 15. Following this event, Broadcom’s share count is set to hit roughly 4.92 billion.
Broadcom’s move is intended to make its shares more accessible to the company’s investors as well as employees. A lower price per share generally makes a stock more attractive to retail investors.
Analysts Weigh In on AVGO
Broadcom shares closed at $1,495 yesterday following a massive 525% rally in its share price over the past five years. The stock is already trading at $1,700 today, and Wall Street is jumping in on the action. Jefferies’ Blayne Curtis, a 5-star rated analyst on TipRanks, has hiked his price target on AVGO to $2,050 from $1,550 while maintaining a Buy rating. The analyst views AVGO favorably owing to robust AI trends and expects the company to benefit from a cyclical recovery in its other operations.
UBS’ Timothy Arcuri has also raised the price target on AVGO to $1,735 from $1,610 while reiterating a Buy rating. Arcuri lauded Broadcom’s solid second-quarter performance. Importantly, Arcuri sees the potential for further performance gains for Broadcom owing to the “sheer scale” of GPU demand.
Is AVGO Stock a Buy, Sell, or Hold?
Overall, the Street has a Strong Buy consensus rating on Broadcom, alongside an average AVGO price target of $1,648.32. The TipRanks Technical Analysis tool is also flashing a Strong Buy signal for the chipmaker on a monthly time frame.
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