Broadcom’s shares rose approximately 15% on Thursday due to a positive annual forecast that underscored strong demand for chips essential in AI technology. Additionally, the announcement of a stock split contributed to the excitement.
The growing use of generative AI has led to increased demand for companies like Broadcom, who are now supplying essential chips and networking tools to support these complex applications.
Broadcom, whose shares have surged 76% over the past year and closed at $1495.5 on Wednesday, follows Nvidia (NVDA.O) in seeking to increase accessibility by announcing a 10-for-1 stock split.
Broadcom, if the gains hold, is expected to increase its market value by about $100 billion. More than 12 brokerages have raised their price targets on the stock. Currently, Broadcom trades at approximately 28 times the expected earnings, while Nvidia has a P/E ratio of about 40, and it competes with Marvell Technology in the market.