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Broadcom announced a $10 billion share buyback program.
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Its diversification seems to give it an edge over other chip stocks.
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Its artificial intelligence business is picking up steam.
Shares of Broadcom (NASDAQ: AVGO) were bucking the broader trend in the market last month as a well-timed buyback announcement, generally positive analyst research, and a new product announcement lifted the stock.
According to data from S&P Global Market Intelligence, the stock finished the month up 15%.
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As you can see from the chart below, Broadcom got a lift from the share buyback announcement at the beginning of the month and then tracked similarly to the S&P 500 for the duration of April but with greater upside.
Like the rest of the stock market, Broadcom shares dove in response to the Trump tariffs announcement.
However, the stock rebounded quickly after the company delighted investors by announcing a $10 billion share repurchase program on April 7. While that represents only about 1% of the company’s market cap, it represented a sign of confidence from management in the face of the uncertainty around the trade war and showed that it was eager to take advantage of any discount in the stock price.
Broadcom stock jumped 5.4% on April 7 as a result, even as the broad market fell again.
On April 9, it surged 19% on news that President Trump was announcing a 90-day pause on most of the “reciprocal tariffs” he had declared the week before. As a cyclical stock sensitive to the global economy, Broadcom was able to outperform the market on that news.
Later in the month, the company announced an advancement in its Symantec cybersecurity business with Incident Protection, an artificial intelligence (AI) tool that predicts cyberattacker behavior.
Finally, Broadcom benefited from an upswing at the end of the month as fears about the trade war tamped down on news reports that the U.S. and China were open to trade talks.
On April 30, Seaport Research initiated coverage of the stock with a buy, noting that Broadcom was well positioned to benefit from the hyperscalers’ intentions to design their own chips, as it’s considered a leader in custom ASIC chips, which the big cloud companies are turning to as a potential replacement for some Nvidia GPUs.
Broadcom won’t report its next earnings results until June, but the company seems well positioned to benefit from the tailwind in AI and ride out any broader market turmoil, thanks in part to its diversification across networking chips, infrastructure products, virtualization software, and cybersecurity.
