Broadcom stock streaks to record high on hopes for Apple deal
By Wallace Witkowski
Chip stock rallies 11.5% Friday to lead S&P 500 gainers as analysts check in on multiyear deal to supply Apple's iPhones with chips
Broadcom Inc. shares surged to new records and led gainers on the S&P 500 index Friday following positive Wall Street commentary, helped along by Apple Inc. earnings, ahead of the chip maker's earnings on Thursday.
Shares of Broadcom AVGO rallied 12% to a record intraday high of $814.98, and finished up 11.5% at a record high of $812.73, with the previous high being this past Thursday's $728.80. Broadcom shares also logged their best one-day performance in more than three years, since an 11.8% gain on March 26, 2020. Broadcom shares also led Friday gainers on the S&P 500 , which closed up 1.3%.
Broadcom announced a deal with Apple Inc(AAPL) on Monday to continue supplying certain components for iPhones, and analysts have been raising their hopes for the chip maker in response. Susquehanna Financial analyst Christopher Rolland, who has a positive rating on Broadcom, raised his price target to $785 from $690 on Thursday.
After Apple's recent earnings showed a surprise jump in iPhone sales, Rolland said reduced iPhone checks "present a modest risk to guidance," but said the "multiyear, multibillion-dollar extension with Apple for RF/Wi-Fi components should mitigate Apple insourcing risk, solidifying this longer-term relationship."
On Friday, Oppenheimer analyst Rick Schafer, who has an outperform rating and a $800 price target, said he sees second half sales led by mobile (Apple) and networking, with a boost from artificial intelligence.
"Broadcom's Tomahawk, Trident and Jericho switches/routers benefit from generative AI adoption as connectivity needs to keep pace w/advances in compute," Schafer said in a note.
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May 26, 2023 16:42 ET (20:42 GMT)
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