Broadcom (AVGO) stock is rising in pre-market trading, extending its winning streak from the previous session. AVGO is up nearly 3% early Wednesday after gaining 4% yesterday. The rally is being driven by Nvidia’s (NVDA) strong Q3 earnings, which eased concerns about an AI bubble and lifted investor sentiment. Broadcom shares also rose following the company’s announcement of new product launches on Wednesday.
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Positive Market Momentum
Nvidia reported stronger-than-expected quarterly earnings, easing concerns that AI-driven stock prices had surged too high. In the last few days, investors have been cautious about the ongoing AI bubble, resulting in a tech sell-off. The company’s forecast reassured markets that demand for AI chips and data centers remains strong.
Investors often view Nvidia’s performance as a benchmark, which can drive increased buying interest in related chipmakers like Broadcom. Strong results from Nvidia may also boost confidence among Broadcom shareholders that AI-driven growth is sustainable, encouraging them to buy AVGO shares.
Additionally, Nvidia’s success could prompt other AI companies to expand their infrastructure, indirectly generating more demand for Broadcom’s networking, storage, and data center solutions.
Broadcom Announces New Product Launches
Broadcom shares were also boosted by the company’s latest announcements. On Wednesday, the company unveiled its Brocade X8 Directors and Brocade G820 56-port switch, calling them the first 128G Fibre Channel platforms built for AI workloads. The company added that its Brocade Gen 8 Fibre Channel offers advanced storage protection for the future of computing.
For context, Brocade X8 Directors and the Brocade G820 56-port switch are devices that let computers and servers in data centers share data very quickly. They are made to handle large amounts of information, especially for AI and powerful computing tasks.
Is AVGO Stock a Good Buy?
Currently, Wall Street has a Strong Buy consensus rating on Broadcom stock based on 28 Buys and two Holds. The average AVGO stock price target of $398.73 indicates 12.5% upside potential from current levels.
