Why Broadcom Stock Ticked Higher on Tuesday
Yahoo Finance ·
Unlike many other tech stocks, Broadcom ( AVGO +1.37% ) landed in positive territory on the second trading day of the week. It closed the trading session more than 1% higher, thanks to capital flight from software titles to hardware makers, and to a bullish analyst update. Tech investors were cycling out of legacy software companies following International Business Machines ' release of its preliminary second-quarter results . These indicate that both the company's revenue and net profit, not under generally accepted accounting principles (GAAP), will come in well under analyst consensus estimates. The company's CEO Arvind Krishna attributed this to a broad adjustment in capital spending by clients during the period. He said they were favoring storage and memory solutions, as well as servers, over software. In his view, this trend is due to anticipated price increases in such goods. In turn, that's being driven by supply constraints related to the massive build-out of artificial intelligence (AI) technology. Broadcom is a high-profile developer and supplier of custom AI chips and AI networking silicon.
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