Broadcom Rehabilitated Itself
One of my favourite stocks and the world's 12th most valuable company, now sitting around $750 billion, suddenly lost 10.35% of its market cap last Friday following its own slightly-less-than-hoped-for revenue forecast. Yet, the minor slip-up ($14 billion instead of $14.04 billion) in the firm's internal, and mostly very positive, outlook for the current quarter came on the back of solid earnings for the previous three months. Both profit (+17.6% YoY and +11.3% QoQ) and sales (+47% YoY and +4.6% QoQ) clearly continued the glorious uptrend in major components of a series of Broadcom's corporate reports for a year and a half. One more side of a positive message has been viewed in raising the company's forecast for annual AI (artificial intelligence) revenue to $12 billion vs earlier expectations of $11 billion. Therefore, from the very beginning, the latest price drop seemed to be a rather absurd action. Indeed, it was short-lived and only provided a rarely good entry point for smart investors. As a result of "panic buying", shares of Broadcom fully closed the gap. The recovery process culminated during the last regular session on September 11, when the stock rebounded by 6.79% to the joy of all stubborn bulls like me. The global supplier of a wide range of semiconductor and infrastructure software products for data centers has multibillion-dollar contracts with a sweet couple of most capitalised companies of Wall Street, which are Microsoft and Apple, of course. This circumstance alone would be enough to hold a significant amount of Broadcom shares in my personal portfolio, without being spooked by any stormy but temporary pullbacks from time to time. Now we may anticipate a more rapid price growth towards an all-time highest point above $185 (previously detected on June 18) or even higher towards $200, when taking into account the S&P 500's unordinary ride yesterday to form a reversal daily candle. It covered a 1.5% initial slide in the two very first hours after the opening bell, with a wide range of intraday price changes between 5,400 and 5,550.
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