Market Momentum Shifts as Broadcom Stock Shows Strength
The stock market today saw a mixed bag of results, with indexes pulling back after strong gains on Wednesday. However, one bright spot was Broadcom (AVGO), which rose a fraction to close at 229.41. Earlier in the session, it jumped as much as 4.6% to 238.60, driven by a beat-and-raise quarterly report from contract chipmaker Taiwan Semiconductor Manufacturing (TSM).
Breaking Out of a Double-Bottom Base
Broadcom stock is trying to break a short downtrend line near 237, according to analysis. In a positive sign, it has found support at its 21-day exponential moving average. This comes after the company broke out of a double-bottom base at a buy point of 185.05 on December 13, following roughly in-line results for its fiscal fourth quarter.
Top Pick for 2025
Investment bank Oppenheimer has named Broadcom stock as one of its top chip stocks for 2025, citing its leverage to the artificial intelligence megatrend. Oppenheimer analyst Rick Schafer noted that AI-related semi stocks led the Philadelphia semiconductor index in 2023 and 2024, and he expects this trend to continue in 2025.
Custom AI Server Chips
Broadcom makes custom AI server chips for major companies such as Alphabet’s Google, Facebook parent Meta Platforms, and TikTok owner ByteDance. It is also designing AI inference chips for ChatGPT creator OpenAI and Apple. Revenue from these new clients is expected to contribute to its top line in 2026.
Networking Chips for AI Systems
In addition to its custom AI server chips, Broadcom also benefits from sales of networking chips for AI systems. This diversification has helped the company maintain its strength in a turbulent market.
Multiple IBD Lists
Broadcom stock is currently on four IBD lists: IBD 50, Big Cap 20, SwingTrader, and Tech Leaders. This is a testament to its strong performance and potential for future growth.
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