If you want to know which individual stocks are currently the hottest in the US stock market, chip manufacturer Broadcom undoubtedly has a prominent position among them;
Broadcom's stock price rose sharply by 5.4% on Monday, closing at $1828.87, hitting a new high again;
According to Dow Jones market data, Broadcom's market cap has surpassed that of Eli Lilly and Co. for the first time in more than two years, becoming the eighth largest company by market cap in the USA.
If you want to know which individual stocks are currently the hottest in the US stock market, chip manufacturer $Broadcom (AVGO.US)$will undoubtedly have a place on the list that everyone is compiling.
Broadcom's stock price rose sharply by 5.4% on Monday, closing at $1828.87, hitting a new high again. According to Dow Jones market data, Broadcom's market cap has surpassed that of Eli Lilly and Co. for the first time in more than two years, becoming the eighth largest company by market cap in the USA.
As of the close on Monday, Broadcom's market cap had reached $851 billion, while Eli Lilly and Co.'s market cap exceeded $841.1 billion. Recently, Broadcom's market cap has almost achieved a series of 100 billion US dollar milestones nearly effortlessly -- the market cap of Broadcom first broke through 700 billion US dollars just last Thursday and then broke through 800 billion US dollars for the first time on last Friday.
According to market data from Dow Jones, based on the current constituents, a year ago Broadcom's market cap ranking in the S&P 500 Index was only 16th, while five years ago it was only 52nd.
Undeniably, Broadcom's previous acquisition of virtual machine software company VMware has helped boost the company's market cap. According to FactSet data, the acquisition, which was completed at the end of last year, added about $50 billion to Broadcom's market cap.
More critically, it is undoubtedly the warm welcome that Broadcom is currently receiving in the AI wave. Broadcom's second-quarter earnings report released last Wednesday showed that the company's earnings per share in the second quarter ending May 5 this year were $10.96, better than the expected mean of $10.80 per share; the company's revenue rose to $12.5 billion, higher than the expected mean of $12.1 billion.
Broadcom is one of the latest semiconductor manufacturers boosted by the AI boom. Broadcom's main products include Ethernet switch chips, data packet processors, ASCI, etc., and its chips are used to provide power for the underlying software in the industry. The company said that sales related to AI products reached $3.1 billion in the second quarter.
Piper Sandler analyst Harsh Kumar wrote over the weekend, "We continue to believe that Broadcom is, aside from Nvidia, the best AI stock as the company has a strong position in the ASIC chip arena and has a powerful software portfolio.
Ben Reitzes, head of the technology research team at Melius Research, holds a similar view when asked if Broadcom is the "other" AI stock worth pursuing. He wrote that the company's AI revenue grew by 280% compared to the previous year and continues to benefit from the large capital expenditures of its two major clients, Google and Meta.
Interactive Brokers: Broadcom should be included in the "Seven Giants" to replace Tesla.
It is worth mentioning that, with the decline in Tesla's stock price over the past few months, it has become a constant drag on the US "Seven Giants," and there have been calls on Wall Street to reconstitute the list of the US "Seven Giants." At present, according to statistics, among the US companies with higher market caps than Broadcom, only Berkshire Hathaway is a non-US tech "seven giant" company. As a direct comparison, Tesla's market cap is more than $250 billion lower than Broadcom's!
According to statistics, among the US companies with higher market caps than Broadcom, only Berkshire Hathaway is a non-US tech "seven giant" company. As a direct comparison, Tesla's market cap is more than $250 billion lower than Broadcom's!
Steve Sosnick, Chief Strategist at Interactive Brokers, believes that Broadcom's rise in 2024 should make it replace Tesla among the "Seven Giants".
"Broadcom has captured the current market hot spot, the component of AI stocks is even stronger. Although Tesla may also be (an AI stock) in the future, Broadcom is the one now," Sosnick said in a television interview on Monday."
By 2024, Broadcom has risen nearly 62% compared to today, while Tesla has fallen nearly 27% due to the pressure on its sales caused by the sluggish adoption of electric cars. Traditional auto manufacturers have also cut back on plans to expand into this area as consumers prefer hybrid cars to electric cars.
Sosnick pointed out that part of the current stock market is driven by "FOMO" (fear of missing out)-Broadcom is part of it, while Tesla is not at present.
He said that technology stocks are still the market leader in the U.S. stock market this year, and the Nasdaq Composite Index and the S&P 500 Index continue to set new highs. As for Broadcom, the company is seeing strong demand from the continued AI boom, with customers requiring high-capacity chips to drive the complex AI applications that the technology industry is pursuing.
Broadcom CEO Hock Tan told investors in last Wednesday's earnings call that the company has seen a "significant increase" in orders from "large-scale customers."
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