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- Stocks Shining Amid the Christmas Rally: Broadcom
Stocks Shining Amid the Christmas Rally: Broadcom
The investment vehicle, which we previously characterized as a kind of safe haven asset for the long-term on September 15, 2022, more than doubled its market value since that time, with only the last three days contributing another 16.2% to the overall result. The last portion of very excited, much stronger upside momentum was related to a fresh Buy rating for Broadcom from the analyst team of Citigroup, as they defined a $1,100 price target, citing a friendly artificial intelligence (AI) environment to offset a partial downturn in other semiconductor segments. Citigroup's recent investigation highlighted the software developer's potential to increase substantially its AI-based sales from nearly $4.0 billion in the financial year of 2023 to over $8.0 billion in the next year.
The share price of Broadcom closed the Wall Street trading session at $1072.28 on December 12, compared to $944.30 before the weekend. High volatility, combined with slightly overbought conditions could give reasons to book some good annual profit if anyone wishes so, yet the horizon still looks clear for nearest months. Broadcom combines the best features from pure-play software platforms, AI chip developers and hardware accelerator offerings, as its chips are supporting chatbots like ChatGPT or Google built Bard or Gemini systems to reply quicker when users make their endless requests.
The technical foundation behind the move became stronger after Broadcom slipped from late November to the first decade of December despite strong 2024 guidance and Q3 2023 earnings, which topped consensus expectations setting new all-time records in both revenue and profit lines. The stock continued its moderate price adjustment within 7% or 8% altogether before and after the report, though the company actually earned $11.06 per share on $9.295 billion in revenue against Wall Street analysts pool estimates, averagely betting on $10.96 per share on $9.28 billion in revenue. Many traders used to consider a somewhat postponed wave of stock price growth as a sign of more healthy developments in trend movements, which is good for the future periods. Semiconductor solutions sales came out at $7.33 billion, up 3% YoY, while infrastructure software added about 7% during the same period to $1.97 billion. Free cash flow came in at $4.72 billion, roughly 51% of revenue. Broadcom also raised its quarterly dividend payment to shareholders by 14% to $5.25 per share, being the thirteenth consecutive increase in annual dividends. Looking to fiscal 2024, many analysts agree with Broadcom's own estimates of the company's revenue to soar above $50 billion, which would mark an increase of 40% from the prior year period, especially as the situation is additionally supported by the recent VMware company's acquisition.
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