• Broadcom could be the next company to join the trillion-dollar club.
• Wednesday’s earnings release showed another hint of the “beating and raising” that has become commonplace.
• Markets consolidate on Friday after a week of CPI-driven fireworks.
• Consumer sentiment in Michigan declines, causing the NASDAQ to decline.

Broadcom (AVGO) the company’s shares rose 12% on Thursday, which is quite a feat for a company already valued at over half a trillion dollars. Overall, AVGO has gained more than 20% this week, inching closer to the $1 trillion club.

After rising 2% on Friday, with a total market capitalization of $790 billion, Broadcom could become the seventh U.S. company to reach the trillion-dollar club. Just Berkshire Hathaway (BRK-B) at $875 billion and Eli Lilly (LLY) worth $837 billion are standing in his way. Now it’s becoming more and more credible Nvidia (NVDA) A 90% market share for artificial intelligence (AI) chips has pushed the market capitalization to $3 trillion.

Major indexes fell on Friday after the University of Michigan’s consumer sentiment index for June hit 65.6, well below the previous reading of 69.1. The consolidation phase is well deserved after four consecutive winning sessions for the NASDAQ, led by a lower inflation report from the US Consumer Price Index (CPI).

Broadcom Stock News

Broadcom produces a wide range of semiconductor components used by customers Apple (AAPL) AND Microsoft (MSFT)especially chips used for connectivity, as well as infrastructure software, including the recent acquisition of VMWare.

In Wednesday’s fiscal second-quarter earnings call, adjusted earnings per share were up 6% from a year earlier, but revenue was up 43% over the same period. The stock’s price of $10.96 was 12 cents above Wall Street estimates, and revenue was $480 million above the consensus.

Revenues related to artificial intelligence (AI) products reached $3.1 billion in the quarter, surprising some analysts.

“This 12% organic revenue growth was largely driven by AI revenues, which increased 280% year-over-year to $3.1 billion, more than offsetting continued cyclical weakness in enterprise and telecommunications semiconductor revenues.” said CEO Hock Tan on the earnings call.

Additionally, full-year guidance was moved above the consensus revenue estimate of $50.6 billion to $51 billion.

The biggest difference was seen in the infrastructure software segment, where Broadcom saw revenue raise from $1.925 billion a year earlier to $5.285 billion, largely due to the inclusion of the VMWare acquisition.

Broadcom Stock Forecast

Broadcom, currently at an all-time high, is still not priced for perfection. Its forward price-to-earnings ratio is an acceptable 35. Nvidia is trading close to 48, while Arm hold (ARM) is above 100. And of course, the stock is in a long-term uptrend. AVGo has gained 100% in the last year and 500% in the last five years.

Trading above $1,700, Broadcom management opted for a 10-to-1 stock split in mid-July, which should spur greater retail purchases and continue the stock market’s upward trend.

The daily chart below shows that Broadcom continues to make higher lows and often experiences buying pressure as it falls to the 50-day or 100-day straightforward moving average (SMA). Additionally, the $1,400 to $1,445 range is a good entry point as there is powerful resistance in both March and May this year.

Broadcom stock daily chart