Broadcom just keeps getting bigger as it's deemed best AI stock besides Nvidia
By Emily Bary
Broadcom passes Eli Lilly to become eighth-largest U.S. company by market cap
Broadcom Inc.'s stock got a big boost in Monday's session, one that furthered its climb up the ranks of the largest U.S. companies.
With Broadcom (AVGO) shares gaining 5.4% in Monday's session, the company saw its market capitalization exceed that of Eli Lilly & Co. (LLY) for the first time in over two years, according to Dow Jones Market Data. That lifted the chip maker into the No. 8 spot among the most valuable companies in the U.S.
Broadcom ended the day with a market cap of more than $847 billion, while Eli Lilly's market cap was upwards of $841 billion. Broadcom first crossed above the $800 billion threshold on Friday, and it first exceeded $700 billion on Thursday.
The company has charged up the ranks in recent years, having been the 16th-largest company in the S&P 500 SPX a year ago and the 52nd-largest five years ago, based on current components, according to Dow Jones Market Data. Admittedly, Broadcom got some assistance from its acquisition of VMware, which closed late last year and added about $50 billion to the company's market capitalization in the process, according to data from FactSet.
Broadcom's stock has drawn cheers recently in the analyst community. "We continue to see [Broadcom] as the best AI play [excluding Nvidia] due to its strong positioning in the custom ASIC business along with its strong software portfolio," Piper Sandler's Harsh Kumar wrote over the weekend, referring to application-specific integrated circuits.
Read: How Nvidia's new Street-high stock-price target stacks up in the chip sector
Ben Reitzes of Melius Research took a similar view in asking whether Broadcom was the "other" artificial-intelligence stock. The company grew AI revenue 280% from a year before and is a play on capital spending from Alphabet Inc. (GOOG) (GOOGL) and Meta Platforms Inc. (META), he wrote.
Broadcom shares logged their seventh session in a row of gains, and they're up more than 30% over that span. The stock rose 12.3% in Thursday's session alone, reflecting Wall Street's upbeat view of Broadcom's latest earnings report and the potential for conservatism in its AI forecast.
Don't miss: Broadcom shares surge as company follows Nvidia's lead with plans for a stock split
-Emily Bary
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06-18-24 0618ET
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