Typically, when a company posts record revenue, it’s good news for the stock and its shareholders. Unfortunately, this was not the case this week when Broadcom (NASDAQ:AVGO) announced its latest results. Despite beating Wall Street expectations and posting truly impressive growth, the stock tanked because it missed analysts’ earnings per share “whisper number,” or the informal consensus, by a narrow margin.
The lesson for investors is, once again, that short-term noise should be largely ignored. Long-term fundamentals still matter, and a decline in a stock’s price based on hype or noise is nothing more than an irrational overreaction. Broadcom’s fundamentals remain incredibly strong.
Did Nvidia miss out in 2009? This rare signal flashes again. In 2009, a “double down” signal appeared for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company that is 1/100th the size of Nvidia. Continue “
Broadcom’s revenue grew 48% year over year, and its artificial intelligence (AI) semiconductor revenue soared 143%, with another $30 billion in bookings.
Broadcom management remains optimistic and expects semiconductor revenue to grow 200% year over year to $16 billion. The company’s shares have risen more than 60% in the last 12 months.
The lesson for investors is valuable. Wall Street has set an excessively high bar for AI-related companies. It was inevitable that, at some point, expectations would exceed reality. This is what happened with Broadcom this week. However, that doesn’t mean Broadcom is losing steam.
For buy-and-hold investors, this is nothing more than an opportunity to acquire more shares. Broadcom remains a worthy investment.
Should You Buy Broadcom Stock Right Now?
Before you buy Broadcom stock, consider this:
He Varied and Dumb Stock Advisor The analyst team has just identified what they believe are the 10 best stocks for investors to buy now… and Broadcom was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you would have $443,191!* Or when NVIDIA made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $1,258,838!*
Now, it is worth noting stock advisor The total average return is 941.%: An overwhelming outperformance of the market compared to the S&P 500’s 206%. Don’t miss the latest Top 10 list, available with Stock Advisorand join an investing community created by individual investors for individual investors.