An Introduction
Shares of Broadcom(AVGO) closed up 24.4% Friday, December 13th, pushing the company’s market cap beyond $1 trillion for the first time with fourth-quarter results that beat Wall Street’s expectations for earnings and showed strong artificial intelligence revenue growth. In doing so, it has been added to the select list of 7 stocks in the MunAiMarkets $1 Trillion Mega-Cap Portfolio already, including Apple, Microsoft, Amazon, Tesla, Alphabet (Facebook), Nvidia and Meta Platforms.
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Q4 Financial Highlights
Revenue was UP 51% year-over-year to $14.05 billion, with AI revenue UP 220% for the year to $12.2 billion. CEO Hock Tan said Thursday that the company is developing custom AI chips with large cloud customers and that, too, added to the analysts raised now have for their stock rising their consensus price target to $250 from $195 (closed Friday at $225).
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The MunAiMarkets Pure-Play Fabless Semiconductor Portfolio
Broadcom is in the MunAiMarkets Pure-Play Fabless Semiconductor Portfolio, which outsources the fabrication (or fab) of chips to specialized foundries while designing and selling the chips directly. The other 5 stocks in the portfolio are Marvell, Broadcom, Monolithic Power Systems, Nvidia, Advanced Micro Devices, and Qualcomm. Go HERE for a live chart (updated minute-by-minute) of the portfolio and each constituent and a comparison of their valuation statistics and price trends with Broadcom to help you make investment decisions.
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Conclusion
Morgan Stanley analysts said Broadcom’s commentary around AI will likely add to long-term enthusiasm around the company, which they expect will continue to build. They said Broadcom remains “one of the most compelling ways to play AI semis” over the next two to three years and that “Overall, the quarter itself will provide a relief vs. low nearer-term expectations, and the longer term commentary around AI will stoke enthusiasm for custom AI chip longer-term prospects — an enthusiasm that was already at a fever pitch.”
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