It’s not necessary to scrutinize stock charts daily to recognize that artificial intelligence (AI) stocks have captured significant attention over the past few years. This interest has particularly fueled a surge in semiconductor stocks, driving up the valuations of key players like Broadcom, whose shares have climbed impressively, increasing by 2.58%.
But just how much have early Broadcom investors gained from this AI stock frenzy? The answer is substantial. Those who invested in Broadcom when it made its public debut in August 2009 have witnessed remarkable growth in their portfolios. A $1,000 investment at the time of the company’s IPO would now be valued at approximately $85,000. Moreover, investors have benefited from an increase in the number of shares they own, thanks to a stock split.
Following a single stock split, investors now enjoy significantly larger holdings
While several prominent semiconductor companies have undergone multiple stock splits over the years—Nvidia, for instance—Broadcom has only executed one stock split. This event took place recently, in July, when Broadcom carried out a 10-for-1 stock split. The mathematics of this are straightforward: if you initially purchased one share of Broadcom stock at its IPO, you would now possess 10 shares in your brokerage account.
With the current share price hovering around $140, it seems that company management does not anticipate another stock split in the foreseeable future.
Is it an opportune moment to increase holdings in Broadcom stock?
The question of whether now is a favorable time to expand one’s investment in Broadcom stock is hotly debated. The company delivered robust financial results for the third quarter of 2024, reporting year-over-year revenue and adjusted EBITDA growth of 47% and 42%, respectively, alongside providing optimistic guidance. However, the stock’s valuation is quite high, trading at approximately 114 times trailing earnings and 28 times operating cash flow.
For those cautious about Broadcom’s valuation, considering an artificial intelligence ETF that includes Broadcom among its assets might be a wiser choice.
Don’t miss this renewed opportunity for substantial gains
Do you ever feel like you’ve missed the chance to invest in top-performing stocks? If so, this could be of interest to you.
Occasionally, our team of expert analysts issues a “Double Down” recommendation for stocks they believe are on the verge of significant growth. If you’re concerned that you’ve missed your opportunity, now might be the ideal moment to invest before it slips away. The results speak for themselves:
– Nvidia: A $1,000 investment when we doubled down in 2009 would now be worth $276,036!*
– Apple: A $1,000 investment when we doubled down in 2008 would now amount to $41,791!*
– Netflix: A $1,000 investment when we doubled down in 2004 would have grown to $364,248!*
At present, we are issuing “Double Down” alerts for three outstanding companies, and opportunities like these are rare.
See 3 “Double Down” stocks ›
*Stock Advisor returns as of 09/10/2024
