Why Broadcom Stock Is Winning Today

Broadcom (NASDAQ: AVGO) shares are up in Tuesday trading. The company’s stock price rose 5.2% as of 2 p.m. ET, according to data from S&P Global Market Intelligence.

Broadcom shares are gaining ground today AppleYesterday’s presentation of new mobile and wearable hardware. Following the event, KeyBanc published a report that listed Broadcom as one of the likely component winners from the launch of Apple’s upcoming iPhone 16 lineup.

Is Broadcom Ready for New iPhone 16 Wins?

At its Glowtime event yesterday, Apple unveiled four new phones: the iPhone 16, iPhone 16 Plus, iPhone 16 Pro, and iPhone 16 Pro Max. The mobile hardware leader also unveiled new AirPods, two new Apple Watch devices, accessories and software, but it’s Broadcom’s most important line of mobile hardware.

Each of the new iPhone 16 devices will support Wi-Fi 7, which will allow the hardware to send and receive data faster and with more reliable connectivity. KeyBanc expects Broadcom to provide key hardware that facilitates the connectivity upgrade, and that seems a likely scenario.

What’s Next for Broadcom Stock?

Broadcom shares have seen volatile trading lately. In addition to an increase in caution about artificial intelligence (AI) stock valuations, the company’s latest quarterly report came with forward-looking guidance that disappointed Wall Street and prompted heavy selling. The company’s share price is down about 19% from its peak earlier this year, but is also up about 32% in the 2024 trading period.

Following today’s earnings, Broadcom is now valued at about 30.5 times this year’s expected earnings. The company’s growth-dependent valuation could set the stage for more near-term volatility, but the tech major has a strong position in the connectivity hardware and software categories that appear poised to benefit from strong growth trends. For risk-tolerant investors looking for long-term plays in the AI ​​space, Broadcom is worth a close look.

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

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

Why Broadcom Stock Is Winning Today was originally published by The Motley Fool