Broadcom Share Price Forecast March 2022 – Time to Buy AVGO?

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Shares of semiconductor company Broadcom (NASDAQ: AVGO) are in the green today, after closing at $641.47 as of March 29th (19:58 EDT). Broadcom shares have delivered market-crushing returns. The shares have gained 712% in 5 years since the start of 2018.

Broadcom – Technical Analysis

Broadcom’s financial statement indicates the market cap at $261.9 billion with total assets worth $73.224 billion. Revenue for 2021 was at $27.45 billion with a profit margin of 24.54% compared to $23.89 billion in 2020.

Moving averages such as Exponential Moving Average (10)(617.79), Simple Moving Average (10) (616.19), Exponential Moving Average (20)(606.23), Simple Moving Average (20)( 599.60) and Exponential Moving Average (30)(600.98) are indicating a buy action. Oscillators such as Relative Strength Index (14)(63.27), Stochastic %K (14, 3, 3)(97.44), Commodity Channel Index (20)(186.58),  Average Directional Index (14)(15.75) and Awesome Oscillator(28.77) are neutral.

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Recent Developments

Broadcom was established as a semiconductor products division of Hewlett-Packard in 1961, which later separated om 1999. It provides a broad range of applications for data centres, networking, software, broadband, wireless, and storage and industrial markets. The company’s buyout of rival Qualcomm was cancelled by executive order in 2018.

On March 3rd, 2022, Broadcom released its fiscal 2022 first-quarter earnings report which indicated that revenue has increased 16% year over year to $7.7 billion. The company’s semiconductor solutions segment accounted for 74% of the total revenue and experienced a 20% year over year growth. All of this was possible due to data centre upgrades, 5G network rollouts and strong enterprise spending.

With the semiconductor business being the main source of income, there are high chances that the shares will continue to win this market due to the booming demand for chips that are used in various industries. Its networking segment is also benefitting from data centre upgrades. Several of Broadcom’s customers have rolled out data centres, leading to large-scale deployments of Broadcom’s Ethernet switching components.

The company’s wireless segment is another source of revenue, which produced a third of the revenue from the semiconductor segment. Apple is its primary customer, which also struck a deal with Broadcom worth $15 billion in 2020 to purchase wireless components for 3 and half years. Broadcom’s business could get a boost from the success of the latest iPhone SE. It is also benefiting from the growing adoption of the Wi-Fi 6 and Wi-Fi 6E wireless standard.

Should You Buy AVGO Shares?

Investors who picked up Broadcom shares in early 2018 have seen their returns double. It played a leading role in the global rollout of 5G wireless networks. This resulted in an increase of 75% in 5 years and cash flow tripled. Currently, the shares may not look cheap after it surged by 1500% in 10 years. The current 5G revolution is expected to be followed by 6G upgrades in the next decade.

Another reason to buy Broadcom shares is the dividend rate, as the company has increased its dividend annually by 48% since 2011. It wont be surprising if the company increases its payout even further with the company’s growth expected to accelerate. In all, Broadcomm looks like a top tech stock to buy given its nice pace of growth. The shares are trading at 33 times trailing earnings. This is a discount on the five-year average earnings multiple which comes in at 50. Thus, investors can scoop the shares up right now at a relatively cheap valuation.

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About Prodosh Kundu PRO INVESTOR

Prodosh Kundu is the Founder & CEO of SERP Consultancy, a prominent Digital Marketing Company in Kolkata, India. Starting his career in 2004, he is a Google AdWords certified internet marketing professional, SEO consultant, strategist, and analyst. With his strong understanding of financial market regulations, stocks, blockchain technology, cryptocurrency, & forex, Prodosh has written thousands of articles, blogs, broker reviews, guides, and offered critical analysis & recommendations on investment opportunities!