[TheDevs]

Broadcom Shares Surge as Earnings Beat Expectations and Stock Split Announced

Semiconductor and infrastructure software specialist Broadcom (NASDAQ: AVGO) experienced a significant surge in its stock price on Thursday following the release of its impressive earnings report for the quarter ended May 5. The company surpassed both revenue and earnings expectations, further fueling investor enthusiasm. Additionally, Broadcom announced a forthcoming 10-for-1 forward split of AVGO stock, making it more accessible to investors. This development comes at an opportune time amidst the ongoing artificial intelligence (AI) boom.

According to CNBC, Broadcom reported adjusted earnings per share (EPS) of $10.96, comfortably surpassing the consensus estimate of $10.84. The company’s revenue for the quarter reached $12.49 billion, exceeding the consensus view of $12.03 billion. Looking ahead, Broadcom anticipates generating approximately $51 billion in sales for fiscal 2024, slightly surpassing the consensus estimate of $50.42 billion. The company’s devices, capable of running AI applications, have positioned Broadcom as one of the chipmakers benefiting from the AI boom.

Notably, AI products contributed $3.1 billion to Broadcom’s top line during the quarter, accounting for approximately 25% of its sales. This significant revenue stream has further ignited investor excitement, particularly in light of the upcoming stock split.

Broadcom’s Board of Directors declared a 10-for-1 forward split of AVGO stock, primarily driven by the substantial expansion of the company’s share price. The split aims to enhance accessibility to Broadcom common stock for investors and employees. The official split is scheduled for July 12, with July 11 being the crucial date for retail investors. Shareholders of record as of the close of the Nasdaq on July 11 will receive nine additional shares of Broadcom common stock for each share held.

CEO Hock Tan’s remarks during the earnings call likely contributed to the growing appetite for AVGO stock. Tan highlighted that the last time Broadcom split its stock was in 2016 when Avago acquired the company. Given the current enthusiasm surrounding AI, this latest stock split could attract even more attention to the dividend-paying tech firm.