Broadcom (AVGO) shares moved 2.5% higher on Thursday as trader’s continue to react to the company’s latest earnings report.
Two weeks ago, Broadcom announced their quarterly earnings to the delight of investors who bid shares almost 40% higher.
Broadcom beat analyst expectations for earnings per share by $0.03. The company’s earnings per share results were $1.42, but it was the company’s forward-looking guidance that stole the show.
Broadcom’s management team raised its revenue target for the next quarter’s earnings to $14.6, higher than analysts’ current expectations. If hit, Broadcom would post revenue growth of 15% next quarter, still higher that the semiconductor industry.
With shares in an overbought situation following their earnings, Broadcom stock was in need of a short-term “correction” that would allow the stock to rest and provide an opportunity for investors to “buy the dip” before advancing higher in January.
The last two weeks have provided the opportunity as the stock traded 13% off of its December 16 highs.
Now, shares are approaching the $150 price with increasing bullish momentum.
Investors should expect that Broadcom shares are likely to break above $250 on their way to a short-term $275 target.
While the stock is in a long-term bull market trend with a price target of $275, the stock is likely to run into some pressure from the market in January and February due to seasonal patterns.
