Why Broadcom Stock Pulls Back Nearly 4% on Tuesday

Motley Fool2024-12-18

Broadcom stock soared after it delivered its fiscal fourth-quarter earnings report last week.Though it delivered strong earnings growth, investors now seem to think the rally was overdone.Chip stocks ...

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VtTeh
2024-12-18
VtTeh
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href=https://www.fool.com/investing/2024/12/17/why-broadcom-stock-is-slipping-today/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Broadcom stock soared after it delivered its fiscal fourth-quarter earnings report last week.Though it delivered strong earnings growth, investors now seem to think the rally was overdone.Chip stocks ...</p>\n\n<a href=\"https://www.fool.com/investing/2024/12/17/why-broadcom-stock-is-slipping-today/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU2054465674.USD","symbol_name":"UBS (LUX) KEY SELEC SICAV DIGITAL TRANSFORMATION T \"P\" (USD) 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far?Investors seem to be debating the fair value of this stock after its post-earnings jump last week. Broadcom's results were mostly in line with analysts' consensus estimates, as was its guidance, but investors were particularly impressed with its AI-related growth. The company said its AI revenue jumped 220% in fiscal 2024 (which ended Nov. 3), and management predicted that AI revenue would grow by 65% in fiscal 2025's first quarter. It based that growth forecast on the high demand for its Jericho 3 Ethernet switches, which are designed for AI networks.Despite investors' enthusiasm for Broadcom's AI business, a broader sense of skepticism seemed to pervade the market Tuesday. Its chip stock peers Nvidia, Arm, and Marvell were all down as well.There wasn't a clear trigger for the sell-off, but investors seem to be worrying again that demand for AI products may not be as strong as current stock prices imply. Nvidia stock is now down four straight sessions in a row amid signs that growth in AI spending is likely to slow next year.What it means for BroadcomHigh expectations are now baked into Broadcom's stock price. It trades at a price-to-earnings ratio of nearly 50 based on adjusted earnings, and its growth rate will moderate as it laps its acquisition of VMware, which closed in November 2023.Still, with AI-related tailwinds building for Broadcom, the stock looks fairly valued. 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Broadcom&#39;s results were mostly in line with analysts&#39; consensus estimates, as was its guidance, but investors were particularly impressed with its AI-related growth. The company said its AI revenue jumped 220% in fiscal 2024 (which ended Nov. 3), and management predicted that AI revenue would grow by 65% in fiscal 2025&#39;s first quarter. It based that growth forecast on the high demand for its Jericho 3 Ethernet switches, which are designed for AI networks.</p><p>Despite investors&#39; enthusiasm for Broadcom&#39;s AI business, a broader sense of skepticism seemed to pervade the market Tuesday. Its chip stock peers <strong>Nvidia</strong>, <strong>Arm</strong>, and <strong>Marvell </strong>were all down as well.</p><p>There wasn&#39;t a clear trigger for the sell-off, but investors seem to be worrying again that demand for AI products may not be as strong as current stock prices imply. Nvidia stock is now down four straight sessions in a row amid signs that growth in AI spending is likely to slow next year.</p><h2 id=\"id_2163396815\">What it means for Broadcom</h2><p>High expectations are now baked into Broadcom&#39;s stock price. It trades at a price-to-earnings ratio of nearly 50 based on adjusted earnings, and its growth rate will moderate as it laps its acquisition of VMware, which closed in November 2023.</p><p>Still, with AI-related tailwinds building for Broadcom, the stock looks fairly valued. It should be a winner over the long term.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Why Broadcom Stock Pulls Back Nearly 4% on Tuesday</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhy Broadcom Stock Pulls Back Nearly 4% on Tuesday\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-12-18 09:42 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2024/12/17/why-broadcom-stock-is-slipping-today/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Broadcom stock soared after it delivered its fiscal fourth-quarter earnings report last week.Though it delivered strong earnings growth, investors now seem to think the rally was overdone.Chip stocks ...</p>\n\n<a href=\"https://www.fool.com/investing/2024/12/17/why-broadcom-stock-is-slipping-today/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU2054465674.USD":"UBS (LUX) KEY SELEC SICAV DIGITAL TRANSFORMATION T \"P\" (USD) ACC","LU1496350171.SGD":"FRANKLIN DIVERSIFIED BALANCED \"A\" (SGDHDG) ACC","LU0882574139.USD":"富达环球消费行业基金A ACC","LU1732799900.SGD":"JPMorgan Investment Funds - Global Income A (irc) SGD-H","LU2433249047.HKD":"THEMATICS META \"R/A\" (HKD) ACC","BK4543":"AI","LU2242650005.HKD":"FIDELITY FUNDS GLOBAL MULTI ASSET DYNAMIC \"A\" (HKD) ACC","LU2430703178.SGD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4H\" (SGDHDG) INC","IE00BHPRN162.USD":"BNY MELLON BLOCKCHAIN INNOVATION \"B\" (USD) ACC","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","BK4551":"寇图资本持仓","LU1712237335.SGD":"Natixis Mirova Global Sustainable Equity H-R-NPF/A SGD","LU2023250843.SGD":"Allianz Thematica Cl AT Acc H2-SGD","LU2272731782.SGD":"Allianz Global Intelligent Cities AM Dis H2-SGD","LU1037948541.HKD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"A\" (HKD) ACC","AVGO":"博通","LU1868836914.USD":"CT (LUX) I AMERICAN \"3\" (USD) ACC","LU2592432038.USD":"WELLINGTON MULTI-ASSET HIGH INCOME \"A\" (USD) ACC","IE00B19Z9Z06.USD":"Legg Mason ClearBridge - US Aggressive Growth A Acc USD","SG9999014567.USD":"UOB UNITED INCOME FOCUS TRUST FUND (USD) ACC","LU0511384066.AUD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (AUDHDG) ACC","LU2505996681.GBP":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4H\" (GBPHDG) INC","LU2505996509.AUD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4H\" (AUDHDG) INC","LU0787776722.HKD":"AB SELECT US EQUITY PORTFOLIO \"A\" (HKD) ACC","BK4592":"伊斯兰概念","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU0985320562.USD":"NORDEA 1 GLOBAL STARS EQUITY \"BP\" (USD) ACC","IE00BQXX3F31.USD":"GUINNESS GLOBAL INNOVATORS \"C\" (USD) ACC","LU0276348264.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN\"AUP\" (USD) INC","LU0289960550.SGD":"AB FCP I - GLOBAL EQUITY BLEND PORTFOLIO 'A' (SGD) ACC","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","IE00BVYPNV92.GBP":"GUINNESS GLOBAL EQUITY INCOME \"C\" (GBP) ACC","IE00B3PB1722.GBP":"GUINNESS GLOBAL EQUITY INCOME \"C\" (GBP) INC","LU0154236417.USD":"BGF US FLEXIBLE EQUITY \"A2\" ACC"},"source_url":"https://www.fool.com/investing/2024/12/17/why-broadcom-stock-is-slipping-today/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2492981499","content_text":"Broadcom stock soared after it delivered its fiscal fourth-quarter earnings report last week.Though it delivered strong earnings growth, investors now seem to think the rally was overdone.Chip stocks fell broadly on Tuesday.After a two-session surge driven by the emergence of the chipmaker's artificial intelligence (AI) business in the fiscal fourth-quarter earnings report it delivered on Thursday, Broadcom fell on Thursday alongside the broader semiconductor sector.While there wasn't any company-specific news about Broadcom, its sell-off was indicative of a larger trend.Did Broadcom's rally go too far?Investors seem to be debating the fair value of this stock after its post-earnings jump last week. Broadcom's results were mostly in line with analysts' consensus estimates, as was its guidance, but investors were particularly impressed with its AI-related growth. The company said its AI revenue jumped 220% in fiscal 2024 (which ended Nov. 3), and management predicted that AI revenue would grow by 65% in fiscal 2025's first quarter. It based that growth forecast on the high demand for its Jericho 3 Ethernet switches, which are designed for AI networks.Despite investors' enthusiasm for Broadcom's AI business, a broader sense of skepticism seemed to pervade the market Tuesday. Its chip stock peers Nvidia, Arm, and Marvell were all down as well.There wasn't a clear trigger for the sell-off, but investors seem to be worrying again that demand for AI products may not be as strong as current stock prices imply. Nvidia stock is now down four straight sessions in a row amid signs that growth in AI spending is likely to slow next year.What it means for BroadcomHigh expectations are now baked into Broadcom's stock price. It trades at a price-to-earnings ratio of nearly 50 based on adjusted earnings, and its growth rate will moderate as it laps its acquisition of VMware, which closed in November 2023.Still, with AI-related tailwinds building for Broadcom, the stock looks fairly valued. 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