Shares in chipmakers and the semiconductor sector have recently experienced a significant pullback. The VanEck Semiconductor ETF NYSE: SMH, a leader with over 37% gains year-to-date, has entered correction territory, falling over 15% from its 52-week high.
Broadcom (NASDAQ: AVGO ) has been riding high on the artificial intelligence wave that electrified the tech sector. The company's strong position in networking infrastructure and custom AI chips for hyperscalers like Alphabet (NASDAQ: GOOG , NASDAQ: GOOGL ) and Amazon (NASDAQ: AMZN ) has investors salivating over its growth prospects.
Analysts think two stocks with recent splits could outperform Nvidia over the next 12 months. Both stocks have been big winners so far in 2024.
Wall Street rarely sees two trends like artificial intelligence (AI) and stock-split euphoria competing for attention. AI drove record highs for major indices in 2024, while stock splits, though cosmetic, also fueled market excitement for certain names.
Semiconductors power many devices that you use every day. You can find this technology in your computer, car, refrigerator, and other everyday items.
Nvidia dominated the AI investing scene for over a year. Broadcom's future growth is projected to be higher than Nvidia's.
Broadcom Inc. (AVGO) closed at $149.26 in the latest trading session, marking a -1.37% move from the prior day.
Since closing at a record high less than 10 days ago, the benchmark S&P 500 index has been on the back foot. For the moment, it's not looking like a whole lot more than a healthy mid-rally correction.
The Magnificent Seven stocks have carried major indices to all-time highs. Some of these stocks were also in the FAANG acronym, but regardless of how you group them, mega-cap big tech companies continue to lead the market.
Big tech earnings may have disappointed some, despite still being pretty good. Commentary on AI spending remains positive, but investors may fear the good times won't last.
Broadcom (NASDAQ: AVGO ) is well-known as a leader in 5G semiconductors, but it's also a chip stock that lags behind many of the top names in this sector — most notably Nvidia (NASDAQ: NVDA ). The company powers the sort of data throughput and connectivity we all rely on with its advanced chips and RF solutions.
Investors should define their goals before entering the market. For low-risk inflation-beating investments, focus on undervalued blue chips.