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Palo Alto, California-based Broadcom Inc. (AVGO) designs, develops, and supplies various semiconductor devices and infrastructure software solutions internationally. The company has a market cap of $1.8 trillion and operates in two segments: Semiconductor Solutions and Infrastructure Software, and offers networking connectivity, wireless device connectivity, servers and storage system solutions, and more.
Companies with a market cap of $200 billion or more are typically referred to as “mega-cap stocks.” AVGO fits squarely into that category, with its market cap exceeding this threshold and reflecting its substantial size and influence in the semiconductors industry.
However, the stock currently trades 24.9% below its 52-week high of $495 recorded on June 3. AVGO has declined 11.9% over the past three months, underperforming the State Street Technology Select Sector SPDR ETF’s (XLK) 2.3% rise during the same time frame.
In the longer term, AVGO has delivered a similar performance. The stock has grown 23.7% over the past 52 weeks, underperforming the 42.6% surge of XLK over the same period. AVGO has been trading above its 200-day moving average since the last trading session, and below its 50-day moving average since this month.
On Aug. 19, AVGO stock declined 4.6% following the announcement of its competitor Marvell Technology landing a deal to develop custom artificial intelligence chips for Google. Following a joint statement from Marvell Technology, Inc. (MRVL) and Alphabet's Google, investors grew cautious of the future of AVGO’s role as the incumbent custom silicon partner for Google's Tensor Processing Unit ecosystem.
When stacked against its rival, NVIDIA Corporation (NVDA) has surged 25.5% over the past year, rallying AVGO.
Despite its underperformance, Wall Street has a highly bullish view of the stock currently. Among the 42 analysts tracking AVGO, the overall consensus stands at a “Strong Buy.” Its mean price target of $517.31 suggests 39.2% upside potential from current price levels.
On the date of publication, Aritra Gangopadhyay did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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