Broadcom Hits Fresh Record High After Stock Split Announcement

Shares of semiconductor maker Broadcom (AVGO) continued rising Monday, setting a fresh record high and extending a stretch that began with last week's earnings report, which included the announcement of a 10-for-1 stock split set to take effect next month.

Broadcom shares have surged over the last year as it has been a beneficiary of an artificial intelligence (AI)-related boom across the stock market. Analysts have voiced optimism about Broadcom's business outlook in recent months, calling the company a "top 2 AI pick" because of its capability to make custom AI chips.

Last Week's Earnings, Stock Split Announcement Fueling Gains

A number of analysts raised their price targets for the company following last week's earnings report, saying the company is a "critical piece" to the growth of the AI industry, along with other tech heavyweights like Nvidia (NVDA) and Alphabet's (GOOGL) Google.

AI-related revenue made up about a quarter of Broadcom's $12.49 billion in revenue for the second quarter, and the company also raised its revenue targets for the full fiscal year.

Broadcom's stock will split after markets close July 12, with shareholders of record on July 11 receiving nine additional Broadcom shares for each share they own.

Companies pursue stock splits for a variety of reasons, as the move is a way to issue more shares without affecting the company's overall valuation. The split lowers a company's stock price, which can improve its liquidity by increasing trading activity.

Several other large companies, including Chipotle Mexican Grill (CMG), Nvidia, and Walmart (WMT), have announced stock splits in recent months.

Broadcom stock was on pace to close higher for a seventh straight session, up 4.3% to $1,809.09 by 12:30 p.m. ET Monday. Shares are up more than 60% in 2024.