Broadcom stock got hit with multiple bearish catalysts today.
Broadcom (AVGO 4.15%) stock got hit with a significant pullback in Wednesday’s trading. The company’s share price fell 4.1% in the daily session. Meanwhile, the S&P 500 declined 0.6%, and the Nasdaq Composite sank 1%.
Volatility connected to bank stock earnings dragged the market lower, and Broadcom also faced valuation pressures connected to semiconductor industry news. Despite the U.S. government approving the processors for export, China is reportedly blocking Nvidia‘s H200 chips from being imported into the country.
Image source: Getty Images.
Broadcom stock slips amid multiple bearish catalysts
The broader market moved lower in Wednesday’s trading as investors reacted to earnings reports from banks, macroeconomic reads, and news that China has blocked the import of Nvidia’s H200 semiconductors. The export of the H200 chips was recently cleared by the U.S., but it now looks like China may not be taking the processors. Broadcom’s connectivity chips are used to link artificial intelligence (AI) processors together to create high-performance servers, and news that China may now be uninterested in the H200 could suggest a weaker growth outlook for the business.
Today’s Change
(-4.15%) $-14.72
Current Price
$339.89
Key Data Points
Market Cap
$1.6T
Day’s Range
$334.42 – $350.69
52wk Range
$138.10 – $414.61
Volume
30M
Avg Vol
28M
Gross Margin
64.71%
Dividend Yield
0.71%
What’s next for Broadcom?
Broadcom will likely continue to be the global leader in connectivity chips for the foreseeable future, and it also has related software and service offerings that could continue to support strong sales and earnings growth. On the other hand, the company trades at a highly growth-dependent valuation — and it’s not immune to macroeconomic and geopolitical pressures. The company is currently valued at roughly 33 times this year’s expected earnings and 16 times expected sales.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
