What's Going On With Broadcom (AVGO) Stock?

Shares of Broadcom Inc AVGO have gained roughly 0.82% to $167.87 since Monday’s open as the U.S. government announced its latest sanctions targeting China’s semiconductor industry.

The Biden administration’s export controls, the third in three years, could intensify challenges for Chinese chipmakers and shift demand toward alternative suppliers like Broadcom.

Broadcom, a key global semiconductor player, specializes in chips essential for data centers, AI and advanced wireless communications. Its high-bandwidth networking chips and custom semiconductors, critical for AI and high-performance computing, may gain traction as Chinese firms struggle to access cutting-edge technologies under U.S. sanctions.

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The new restrictions target 140 Chinese entities and advanced chipmaking tools, likely forcing Chinese customers to seek global suppliers. Broadcom's diversified production base and strong supply chains position it to meet rising demand.

The sanctions also expand the foreign direct product rule, limiting China's domestic chip development. With AI-driven data centers and networking infrastructure demand surging, Broadcom could benefit from this geopolitical shift.

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Is AVGO A Good Stock To Buy?

An investor or trader's decision to buy or sell a stock is unique to their time horizon and risk tolerance. Many typical investors evaluate earnings growth and valuation on a particular stock before making a decision.

For example, for Broadcom AVGO, you'll notice that earnings in its last quarter grew 3.33% source. As an investor, you'll want to decide whether that's better or worse than what you'd like to see among stocks in your portfolio.

On the valuation side, Broadcom's price to earnings ratio – a measure of how much an investor pays for the company's earnings – is projected to grow 23.55% in the current quarter when compared with last year. That places it above similar businesses NVIDIA, Taiwan Semiconductor, Advanced Micro Devices in its sector. You'll need to decide whether that makes it more or less attractive based on how you think the company will perform over time.

There are many different valuation metrics that may help you make a decision. Find more on Broadcom's quote page, or if you'd like a deeper dive in an advanced program, try Benzinga PRO for free.