Key insights
- Broadcom's stock reached a new record high, driven by strong demand in the AI sector and significant partnerships. Google's $80 billion AI funding plan and extended chip development deal with Broadcom are key bullish catalysts. Upcoming earnings are expected to show strong performance, with investors focused on future outlook and the impact of recent AI-related deals with Google and Meta, suggesting continued positive momentum for the chipmaker.
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Broadcom's stock is rallying to fresh highs ahead of its latest earnings report tomorrow, with a bit of help from Google parent Alphabet.
Shares of Broadcom (AVGO) rose nearly 5% Tuesday, topping Monday's record close, amid a broader market rally as a string of better-than-expected earnings reports and signs of strong demand improved sentiment around the AI trade. Google parent Alphabet (GOOGL) said yesterday it plans to raise $80 billion to support its AI ambitions, which could also bode well for supplier Broadcom, though shares of Alphabet slid nearly 4% following the news.
Tuesday's gains leave Broadcom's stock up close to 40% since the start of the year, after rebounding from lows in late March as signs of growing business with Google helped stoke more support for the shares.
The fundraising news from Google could add to recent enthusiasm for Broadcom's stock.
Back in April, Broadcom stock rallied following the announcement of an extension of its partnership with Google to co-develop the search giant's custom AI chips, and a new deal with Meta Platforms (META) to co-develop the Facebook and Instagram parent's own custom chips.
Broadcom is expected to report another quarter of big gains in sales and profits after the closing bell tomorrow, though analysts have said investors will likely be more focused on the chipmaker's outlook following its recent deals.
The stock has surged close to 90% over the last 12 months, while Alphabet has gained about 120%. Both have far outpaced the S&P 500's roughly 27% rise over the same period.