Stock-Split Watch: Is Broadcom Next?

Ever since Broadcom Inc. (AVGO) executed a 10-for-1 stock split in July 2024, investors have been wondering if the semiconductor giant is poised for another split. The question looms as Broadcom's stock price has soared nearly 30% since the last split, with most of that growth occurring in just the past few weeks. But is another stock split on the horizon for Broadcom?

Broadcom's recent stock split history and the timing of its most recent split could provide some insight into the company's decision-making process. The company has a history of stock splits, with previous splits occurring in 1999, 2000, and 2006 when it was trading under the ticker BRCM. The most recent split, a 10-for-1 forward stock split, took place on July 12, 2024. This history suggests that Broadcom is not averse to using stock splits as a tool to make its shares more accessible to a broader range of investors and employees.

The recent stock split was announced in June 2024 and executed in July 2024, indicating that Broadcom is willing to act quickly when it deems a stock split beneficial. The company's management, in a statement, mentioned that the move was to make ownership of Broadcom stock more accessible to investors and employees.



However, the likelihood of another stock split soon (within the next few months) is low, as Broadcom has just completed a 10-for-1 split. The company might consider another split if its stock price continues to rise significantly, making it less accessible to smaller investors and employees.

Broadcom's impressive AI revenue growth and market share could also play a role in the company's decision to split again in the future. In fiscal 2024, Broadcom's AI revenue soared by 220% to $12.2 billion, driven by custom AI solutions and hyperscale clients like Google, Meta, and ByteDance. This growth has led to Broadcom surpassing more than 50% market share for AI hardware sales, with 76% of sales coming from custom AI accelerators. Analysts estimate that Broadcom could command $37.550 billion in revenues if it maintains its market share by 2027.



Broadcom's strong AI performance has been recognized by analysts and investors. Morgan Stanley analyst Joseph Moore raised the firm's price target on Broadcom to $265 from $233 and kept an "Overweight" rating on the shares, highlighting the company's growing customer base and potential for Ethernet expansion in artificial intelligence. This positive sentiment from analysts and investors could further boost Broadcom's stock price, potentially leading to another stock split.

In conclusion, while it is difficult to predict with certainty whether Broadcom will split its stock again in the near future, the company's history of stock splits and the recent timing of its most recent split suggest that it is not out of the question. However, the likelihood of another split soon is low, and any future split would likely depend on the company's stock price performance and accessibility considerations. Broadcom's impressive AI revenue growth and market share could also influence the company's decision to split again in the future, as investors may view the stock as undervalued and demand for the shares increases.