What are the most popular stocks in the US stock market right now? Chip manufacturer Broadcom will undoubtedly have a place on the list that everyone has compiled.
The stock price of Broadcom rose sharply by 5.4% again on Monday, closing at $1828.87, continuing to reach a historic high. According to Dow Jones market data, Broadcom's market value has surpassed Lilly for the first time in over two years, becoming the eighth highest company in the United States by market value.
As of Monday's close, Broadcom's market value had reached $851 billion, while Lilly's market value exceeded $841.1 billion. Recently, the market value of Broadcom has hit multiple levels of billions of dollars, almost as simple as "finding something in one's bag" - Broadcom's market value only surpassed 700 billion dollars for the first time last Thursday, and then surpassed 800 billion dollars for the first time last Friday.
According to data from the Dow Jones market, based on current constituent stocks, Broadcom's market value ranking in the S&P 500 index was only 16th a year ago, and 52nd five years ago.
It is undeniable that Broadcom's previous acquisition of virtual machine software company VMware has helped to increase the company's market value. According to FactSet's data, the acquisition completed at the end of last year added approximately $50 billion to Broadcom's market value.
More importantly, undoubtedly, it is the enthusiastic pursuit that Botong is currently receiving in the AI wave. The second quarter financial report released by Broadcom last Wednesday showed that in the second quarter ending May 5th this year, the company's profit per share was $10.96, better than the expected average of $10.80; The company's revenue increased to $12.5 billion, higher than the expected average of $12.1 billion.
Broadcom is one of the latest semiconductor manufacturers to be boosted by the AI craze. Broadcom's main products include Ethernet switching chips, packet processors, ASCI, etc. Its chips are used to power underlying software in the industry. The company stated that in the second quarter, $3.1 billion in sales were related to artificial intelligence products.
Piper Sandler analyst Harsh Kumar wrote over the weekend, "We continue to believe that Broadcom is the best AI themed stock after Nvidia, as the company holds a strong position in the ASIC chip field and has a strong software portfolio."
Ben Reitzes, the head of the technology research team at Melius Research, held a similar view when asked if Broadcom was another AI stock worth pursuing. He wrote that the company's artificial intelligence revenue has increased by 280% compared to the previous year and is continuing to benefit from the massive capital expenditures of its two major clients - Google and Meta.
Yingtou Securities: Broadcom should be listed as one of the "Seven Giants" to replace Tesla
It is worth mentioning that with the decline of Tesla's stock price in the past few months, it has become a drag on the "Big Seven" of the US stock market. The call for whether the title of the "Big Seven" of the US stock market should be re listed has always existed on Wall Street. At a time when Broadcom's market value has entered the top eight of the US stock market, strategists at Interactive Brokers once again expressed similar views in their latest interview this week.
According to statistics, currently only Berkshire is one of the non US technology "Big Seven" companies with a higher market value than Broadcom. As a direct comparison, Tesla's market value is already over 250 billion US dollars lower than Broadcom!
Steve Sosnick, Chief Strategist at Yingtou Securities, believes that Broadcom's rise in 2024 should enable it to replace Tesla among the "Big Seven".
"Broadcom has captured the current market trends, with AI stocks having a stronger component. Although Tesla may also be (AI stocks) in the future, Broadcom is now," Sosnick said in a TV interview on Monday.
Broadcom has surged nearly 62% so far in 2024, while Tesla has fallen nearly 27% due to the low adoption rate of electric vehicles, which has put pressure on Tesla's sales. Due to consumer preference for hybrid vehicles over electric vehicles, traditional car manufacturers have also reduced their plans to expand into this field.
Sosnick pointed out that the current stock market is partially driven by "FOMO" (fear of short selling) - Broadcom is a part of it, while Tesla is currently not.
He said that technology stocks are still the leader in the US stock market this year, with the Nasdaq Composite Index and the S&P 500 Index continuously reaching new highs. As for Broadcom, the company is seeing strong demand due to the ongoing artificial intelligence boom, with customers needing high-capacity chips to drive the complex artificial intelligence applications that the technology industry is pursuing.
Hock Tan, CEO of Broadcom, told investors during last Wednesday's earnings conference call that the company has seen a significant increase in orders from "ultra large scale customers".