If you bought Broadcom stock at the IPO, here’s how many shares you’d own now

You don’t need to study the stock charts daily to know that artificial intelligence (AI) stocks have been on a roll for the past couple of years. The market’s voracious appetite for semiconductor stocks, in particular, has led to actions by top producers such as Broadcom (NASDAQ: AVGO) increasing in value.

But just how much did early investors in Broadcom benefit from the growing enthusiasm for AI stocks? many. Those who clicked the button to buy Broadcom stock when it debuted on the public markets in August 2009 have seen their investments grow in value. A $1,000 investment at the time of the company’s IPO would now be worth about $85,000. Investors also saw its share count increase quantitatively due to its stock split.

After a single stock split, investors have many more stocks in their portfolios

While there are some semiconductor stalwarts who have completed multiple stock splits over the years — I’m looking at you, Nvidia — Broadcom has only split its stock once. And it happened recently. In July, Broadcom executed a 10-for-1 stock split. The math, then, is remarkably simple. If you purchased a single share of Broadcom stock when the IPO occurred, you now have 10 shares in your brokerage account.

With shares priced around $140, management likely doesn’t see another stock split even remotely visible on the horizon.

Is now the time to load up on Broadcom stock?

Whether today represents a good opportunity to add to Broadcom stock is a source of considerable debate. The company reported strong financial results in the third quarter of 2024, including year-over-year increases of 47% and 42% for revenue and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), respectively, and issued guidance auspicious. However, the stock trades at a rich valuation, changing hands at about 114 times trailing earnings and 28 times operating cash flow.

For investors hesitant to buy Broadcom stock because of its valuation, an AI ETF that counts the stock among its holdings may be a better option.

Should you invest $1,000 in Broadcom right now?

Before buying Broadcom stock, consider the following:

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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

If You Bought Broadcom Stock at the IPO, Here’s How Much Share You’d Own Now was originally published by The Motley Fool