What Happened?
Shares of fabless chip and software maker Broadcom (NASDAQ:AVGO) jumped 5% in the morning session after stocks rebounded, following a broad-based sell-off the previous day. The Nasdaq was down 4%, while the S&P fell 2.7% as concerns over the ongoing trade war continued to spread. While those concerns haven't exactly disappeared, it's likely some investors looked to take positions in some of the beaten-down stocks, especially some of the high-quality names that got caught up in the sell-off.
The shares closed the day at $189.96, up 3% from previous close.
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What The Market Is Telling Us
Broadcom’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. +
The previous big move we wrote about was 8 days ago when the stock dropped 6.3% as the major indices tumbled after the Trump administration confirmed that the planned 25% tariffs on imports from Canada and Mexico, two of the largest trading partners of the United States, would proceed as planned. The news added to the market's growing unease, which had been building since the start of 2025. For Wall Street analysts, investors, and businesses, the announcement underscored the urgent need to plan ahead and factor the potential downside of the tariffs into their financial forecasts. Key concerns included rising production costs, which are often passed on to consumers, and the risk of inflation, further heightening economic uncertainty.
Broadcom is down 18.1% since the beginning of the year, and at $189.98 per share, it is trading 24% below its 52-week high of $250 from December 2024. Investors who bought $1,000 worth of Broadcom’s shares 5 years ago would now be looking at an investment worth $7,723.
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