Broadcom Stock Analysis: Is AVGO Stock-Split Possible In 2024?

Broadcom Stock Analysis: Is AVGO Stock-Split Possible In 2024?

Broadcom stock has been a focal point for investors, showcasing a remarkable performance in recent months.

The surge in shares of AI-related semiconductor companies has particularly caught attention, with Broadcom leading the pack. However, as the company grapples with market expectations and the specter of overvaluation, the question arises: What lies ahead for AVGO stock, and could a stock split be on the horizon in 2024?

Impressive Growth Trajectory

Over the past year, Broadcom stock has surged by 101%, marking a phenomenal 2,600% increase over the past decade, inclusive of dividends. With a market capitalization of $600 billion, Broadcom stands as one of the behemoths in the global market.

Broadcom stock

In its latest fiscal Q1 results for 2024, Broadcom reported revenues of $12 billion, surpassing analyst estimates. Adjusted earnings per share stood at $10.99, outperforming projections. The notable acquisition of VMWare in 2023 played a pivotal role in amplifying Broadcom’s revenue, with a 34% year-over-year increase. Organic sales also demonstrated robust growth at 11%, driven primarily by burgeoning demand for AI products.

While semiconductor solutions witnessed a 4% rise in sales, infrastructure software revenue soared by more than double, reaching $4.6 billion. Adjusted EBITDA surged by 26%, reaching $7.16 billion, while adjusted earnings experienced a 6.4% year-over-year increase. Despite surpassing estimates, Broadcom stock saw an 8% decline over the last two trading sessions post-announcement, primarily due to maintaining conservative full-year revenue guidance.

The Role of AI in Broadcom’s Growth

Artificial intelligence emerges as a pivotal driver of Broadcom’s revenue and earnings trajectory in the forthcoming decade. CEO Hock Tan accentuated the significance of AI during the recent earnings call, highlighting strong demand for networking products in AI data centers and custom AI accelerators from hyperscalers. Broadcom’s networking solutions portfolio plays a crucial role in facilitating generative AI tools, contributing significantly to chip sales.

Future Growth Prospects

Broadcom anticipates a substantial surge in networking sales, projected to increase by 30% year-over-year, attributed to the burgeoning deployments of networking connectivity and expansion of AI accelerators in hyperscalers. The company also forecasts generative AI to contribute 25% to semiconductor revenue in fiscal 2024.

Analysts anticipate a 28.3% rise in sales to $46 billion, with earnings expected to expand by 10% to $46.47 in fiscal 2024. With forward earnings multiple of 28x, Broadcom stock is deemed reasonably valued, considering the forecasted annual earnings growth of 13.8% over the next five years. Out of 26 analysts covering Broadcom stock, 22 recommend a “strong buy,” while four recommend a “hold.” The average target price for AVGO stock stands at $1,282.34, slightly below the current trading price.

Also read: Best AI Stocks to Buy in 2024

Is a stock split possible for Broadcom stock in 2024?

Is a stock split possible for Broadcom stock in 2024?

The prospect of a stock split for Broadcom stock in 2024 is indeed intriguing, considering its remarkable growth trajectory and the challenges posed by its soaring stock price. With shares trading at over $1,200, accessibility for everyday investors has become a concern, prompting speculation about a potential split to make AVGO stock more affordable.

Broadcom’s ascent to prominence in the semiconductor industry has been driven by strategic acquisitions and a relentless focus on innovation, particularly in the realm of artificial intelligence (AI). Its merger with Avago Technologies in 2016 marked the beginning of a transformative journey, culminating in the acquisition of cloud software developer VMware in 2023, a move that significantly expanded Broadcom’s footprint in the AI landscape.

VMware’s critical role in providing cloud software solutions for optimizing computing power has synergized with Broadcom’s existing AI initiatives, positioning the company as a key player in the AI-driven technology ecosystem. From high-bandwidth data center switches to cybersecurity solutions leveraging generative AI, Broadcom’s diverse portfolio underscores its commitment to shaping the future of AI-enabled innovation across multiple industries.

The company’s robust financial performance further strengthens the case for a potential stock split. With record-high revenue of $35.8 billion in 2023 and projected revenue growth of 40% in 2024, Broadcom’s trajectory suggests sustained value creation for investors. However, concerns about the concentration of revenue from key clients, notably Apple, highlight the need for strategic diversification to mitigate long-term risks.

While a stock split alone may not fundamentally alter Broadcom’s valuation, it can enhance accessibility for a broader spectrum of investors and potentially broaden its investor base. By reducing the per-share price, a split would democratize access to Broadcom stock, aligning it with industry peers like Tesla, Amazon, and Nvidia, and facilitating greater participation in Broadcom’s AI growth story.

Moreover, a split could address concerns about the stock becoming increasingly out of reach for small investors and employees seeking to participate in Broadcom’s success. By making shares more affordable, a split could foster greater liquidity and market efficiency, while potentially diluting the voting power of institutional investors, a development that could be viewed positively by retail investors.


In conclusion, the stellar performance of Broadcom stock, driven by its strategic acquisitions and focus on AI innovation, sets a compelling stage for potential growth and value creation. While speculation surrounds the possibility of a stock split in 2024 to address accessibility concerns, the company’s robust financials and forward-looking strategies position it favorably in the semiconductor landscape.

Whether or not a split materializes, Broadcom’s commitment to shaping the future of AI-enabled technologies underscores its resilience and potential for continued success in the market. Investors should monitor developments closely, recognizing the company’s potential to navigate challenges while capitalizing on emerging opportunities.

Leave a Comment

Your email address will not be published. Required fields are marked *