Amid all fluctuations related to tariff Nasdak: AVGO It was better than many. Since the announcement of the Trump tariff hit the markets on April 3, Broadcom shares increased by approximately 8 % As of April 9.
This performance is impressive, given that the S&P 500 is approximately 3 % during that period. Investco phlx semiiconductor etf Nasdak: soxq 2 % decreased.
Broadcom today
As of 09:38 AM East
- 52 weeks
- 119.76 dollars
▼
$ 251.88
- Profit
- 1.35 %
- P/E ratio.
- 142.60
- The target price
- 231.48 dollars
However, Broadcom fell more than 10 % on April 3 as a reaction to the Liberation Day announcement.
Another 5 % decreased the next day as the Chinese announced mutual definitions. Thus, it is clear that the markets feel that Broadcom has some risk of customs tariffs.
This comes despite the fact that Trump excluded semiconductors from the customs tariff.
The analysis below will collapse Broadcom tariffs are displayed in two ways: direct and indirect exposure.
You will also look for the reason for the arrow’s performance relatively well.
The effects of direct tariff
In general, because semiconductor is exempt from definitions, Broadcom directly It is somewhat minimal. However, definitions can come on semiconductors. President Trump recently said The definitions will come on the chips.Very soon“. This would create a major impact on Broadcom. In 2024, 20 % of the company’s total revenues He came from China. Definitions of these goods will hinder the country.
However, at the present time, the direct impact of the definitions on Broadcom is not the main concern, especially with Trump softening his position. Announce Countries that do not enacted a retaliatory tariff Be Exempt from the latest American definitions. This market is sent – and Broadcom – it indicates that Trump does not draw a solid line in the sand and can reduce aggressive definition policies. It also indicates that it may retract the idea of implementing the chips tariffs.
It is worth noting that the customs tariff was not a major topic of conversation in Broadcom’s meetings with analysts. Since August 2024, participants in the profits of the five company or group calls have used the word “definitions” for only three times.
The indirect effects of tariffs: a greater problem in Broadcom
the The indirect effect of definitions It is likely to be more effective on Broadcom. Broadcom chips containing definitions. the The vast majority of chips manufacture occurs in Asia, This means that the final products shipped to the United States will face higher costs.
Broadcom shares expectations today
231.48 dollars
Moderate purchase
Based on 27 analyst classifications
| The current price | 185.15 dollars |
|---|---|
| High expectations | $ 300.00 |
| Average expectations | 231.48 dollars |
| Low expectations | $ 170.00 |
Broadcom
These higher costs will lead to the deterioration of the demand for these products and thus Broadcom chips inside. This can affect both AI BROADCOL companies and non -AII chips. Both constitute a little less than 28 % of revenues in the last quarter.
Ining Nasdak: AaplAnd that use its chips in its consumer devices. With the customs tariffs is expected to affect Apple sales and profits, Broadcom is also successful.
AI servers can be greatly affected by Broadcom By Asian manufacturing. Reports indicate that in general, 60 % of artificial intelligence servers are made in Mexico, And 30 % comes from Taiwan. Stacy Ragson of Bernstein does not expect research that the definitions will affect those servers made in Mexico.
If the manufacture of the AI server from Broadcom is similar to these numbers, it may avoid a great deal of definitions of AI’s works. It is important to note that the sites of companies that make these servers for Broadcom are unknown. Actual numbers can be significantly different.
Why was the Broadcom’s performance relatively good in the bad market conditions
One of the possible reasons because Broadcom has rested relatively well is that Artificial intelligence agents are fonds. These companies are rich in criticism and see Amnesty International as important as their long -term goals. This means that there is a large part of Broadcom sales that have a chance to stay so sound because these companies give priority to spending on artificial intelligence.
In addition, Infrastructure programs made up 45 % of the company’s revenues in the last quarter. This is not affected by the current tariffs. However, companies can reduce spending here to compensate for higher costs in other areas.
Another factor was a blessing of Broadcom’s shares, a major advertisement I recently released. Broadcom Announced a 10 billion dollar shares program After the market was closed on April 7, a A sign of the constant broadcom In its work and its ability to generate money despite the uninterrupted macroeconomic environment.
In general, there is a reason for We believe that Broadcom has a mild insulation of definitions. However, if the definitions lead to recession, this will definitely be bad to work. It will be interesting to see what the administration says about the drivers to move forward.
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