The semiconductor company has an eye-popping valuation.Shares of Broadcom (AVGO 5.36%) have been soaring this year as the semiconductor company scored major AI chip wins, but investor sentiment shifted hard last week. Broadcom stock dropped by more than 11% on Friday in reaction to the company's report for the fourth quarter of fiscal 2025.Broadcom's results and guidance were stellar. Revenue surged 28% year over year, adjusted EPS increased 37%, and the company forecasted strong sequential growth in the fi ...

Core Viewpoint - Broadcom's stock experienced an 11.4% decline due to concerns over AI-related revenue pressure on gross margins and a subdued growth outlook for its AI business, raising questions about the sustainability of its growth and margin trajectory [2] Company Overview - Broadcom operates as a $1.7 trillion company with $60 billion in revenue, currently trading at $359.93 [2] - The company has achieved a 12-month revenue growth of 28.0% and maintains an operating margin of 39.0% [2] - Broadcom's liquidity is characterized by a Debt to Equity ratio of 0.05 and a Cash to Assets ratio of 0.06 [2] Valuation Metrics - Broadcom's stock is categorized as Attractive but Volatile, with a P/E multiple of 68.6 and a P/EBIT multiple of 56.5 [3][6] - Historically, the stock has provided a median return of 140% within a year after sharp declines since 2010 [6] Downturn Resilience - In various economic downturns, Broadcom's stock has shown a slightly worse impact compared to the S&P 500 index, both in terms of the extent of decline and speed of recovery [4] - For instance, the stock declined by 36.7% from a high of $67.43 on December 27, 2021, to $42.71 on October 14, 2022, while the S&P 500 experienced a peak-to-trough decline of 25.4% [7] - The stock rebounded to its pre-Crisis peak by May 18, 2023, and reached a high of $412.97 on December 10, 2025, currently trading at $359.93 [7] Historical Performance - During the 2020 Covid Pandemic, Broadcom's stock fell by 48.3% from a high of $32.47 on February 12, 2020, to $16.79 on March 18, 2020, compared to a 33.9% decline for the S&P 500 [8] - The stock regained its pre-Crisis peak by August 4, 2020 [8] - In the 2018 correction, the stock fell 28.9% from a high of $28.46 on November 27, 2017, to $20.25 on July 13, 2018, while the S&P 500 had a peak-to-trough decline of 19.8% [9] - The stock fully recovered its pre-Crisis peak by March 15, 2019 [9]

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Core Insights - Fannie Mae and Freddie Mac have significantly increased their mortgage-backed securities and home loans, aiming to lower lending rates and enhance profitability ahead of a potential secondary offering [1][5]. Company Overview - Fannie Mae and Freddie Mac are large government-sponsored enterprises designed to support the home loan market, facilitating easier access to mortgages [2][3]. - They underwrite over 50% of all mortgages in the U.S., providing financial guarantees on mortgage bonds, which is essential for financing home loans [3]. Financial Activities - In addition to their primary business of providing financial guarantees, they also purchase mortgage bonds and home loans, generating revenue through these investments [4]. - Since June, their investment portfolio has grown by approximately 25%, reaching around $233 billion, within a broader agency mortgage bond market valued at about $9 trillion [5]. Market Expectations - Analysts predict that Fannie Mae and Freddie Mac may add an additional $100 billion to their portfolios, although the exact trajectory remains uncertain due to limited communication from the companies and their regulator [6]. - The strategy of increasing their investment portfolios is seen as a way to improve earnings, which is crucial for any future public offering [7][8].

Broadcom (AVGO) stock retreated sharply following the release of its fourth-quarter fiscal 2025 earnings. Despite delivering results that exceeded market expectations, shares of the semiconductor and software company fell 11.4% on Friday, Dec. 12. This dip reflects profit-taking rather than deterioration in underlying business performance. The pullback comes after an exceptional run in 2025. Broadcom has been one of the major beneficiaries of the surge in artificial intelligence (AI) spending, with stron ...

Group 1: Market Overview - The influence of the "Magnificent 7" on the market is diminishing, accounting for approximately 43% of S&P 500 gains, raising questions about the sustainability of AI spending [1] - Wall Street remains optimistic about the AI trade, with Jeffre maintaining that it is "still in fashion" [1] - Broadcom is highlighted as a top pick with a price target of $350, benefiting from custom chip adoption and existing contracts with hyperscaler customers like Google and Meta [1] Group 2: Company-Specific Insights - Nvidia is still favored by analysts despite recent sell-offs, with a price target of $250, as fears regarding its technology and valuation are viewed as overblown [1][2] - Micron is expected to report strong earnings, with a buy rating from Rosenblad, citing disciplined supply growth and increasing memory demand from AI applications [3] - Broadcom experienced an 11% drop post-earnings, attributed to concerns over potential loss of business from Google, which may consider using MediaTek for its next-generation tensor processing units [4][6]

Morning. Christina Parts Neville joins us with how Wall Street sees the AI trade right now and Sim Modi has a closer look at how some of these widening bond yields for Oracle and some other hyperscalers might be a warning sign for a bubble. Let's begin with KP. Morning KP. >> Good morning Carl. Well, the Magnificent 7's grip on the market is loosening through November. The mega cap tech cohort accounted for roughly 43% of the S&P 500 gains, but that influence is fading. Investors are questioning the sustain ...

After failing to sustain an initial move to the upside, stocks have shown a lack of direction over the course of the trading session on Monday. The major averages have pulled back well off their highs of the session and have recently been bouncing back and forth across the unchanged line.Currently, the major averages are narrowly mixed. While the S&P 500 is up 7.97 points or 0.1 percent at 6,835.38, the Nasdaq is down 10.22 points or less than a tenth of a percent at 23,184.95 and the Dow is down 14.31 poi ...

Core Viewpoint - The article presents a list of 12 stocks that are recommended for investment during the countdown to the new year, highlighting their long-term growth potential and current market conditions. Group 1: Recommended Stocks - **Apple**: Expected to achieve an 11% gain for the year, with a strong brand and growing AI integration across products, which may drive future revenue growth [5][6]. - **Costco**: Trading at 43x forward earnings estimates, down from over 58x, with a strong business model and high membership renewal rates above 90% in the U.S. and Canada [7][9]. - **Carnival**: The world's largest cruise operator has returned to profitability and is paying down debt, trading at only 11x forward earnings estimates [11][12]. - **Intuitive Surgical**: A leader in robotic surgery with a strong moat due to high costs of its systems and recurrent revenue from instruments and accessories [13][15]. - **Vertex Pharmaceuticals**: Leading in cystic fibrosis treatment with strong revenue and growth potential in new treatment areas [16][18]. - **Coca-Cola**: Strong brand and distribution network with a history of dividend increases for over 50 consecutive years, making it a solid choice for passive income [19][20]. - **Pool Corp.**: The largest supplier of pool equipment, trading at 22x forward earnings estimates, with consistent demand for maintenance services [21][22]. - **Amazon**: A leader in e-commerce and cloud computing, benefiting from AI growth, with AWS reporting a $132 billion annual revenue run rate [24][25]. - **Target**: Facing challenges but may recover in 2026, trading at 13x forward earnings estimates, presenting a potential buying opportunity [27][28]. - **CRISPR Therapeutics**: Recently approved a blood disorder treatment, with expected significant growth in the coming year [29][30]. - **Broadcom**: A networking giant emerging as a potential AI chip winner, with high demand for custom chips [31][32]. - **Taiwan Semiconductor Manufacturing**: A key player in chip production for AI, benefiting from multiple clients and significant investments in U.S. manufacturing [33][34].

Market Overview - US stock indices opened higher on December 15, with the Dow Jones up 0.33%, S&P 500 up 0.48%, and Nasdaq up 0.58%, but later all indices experienced a decline, erasing initial gains [1] - As of 23:27, the Dow Jones Industrial Average was at 48,341.39, down 116.66 points (-0.24%), Nasdaq at 23,048.60, down 146.57 points (-0.63%), and S&P 500 at 6,806.35, down 21.06 points (-0.31%) [2] Technology Sector Performance - Major tech stocks showed mixed results, with Tesla initially rising 4.7% and Nvidia up 1.5% before both lost their gains [2] - Chip stocks continued to decline, with Oracle and Broadcom both down nearly 4%, and iRobot's stock plummeting 69% after announcing bankruptcy [2] Chinese Concept Stocks - The Nasdaq China Golden Dragon Index fell nearly 1.7%, with Baidu down over 4%, Alibaba down over 3%, and Li Auto down over 2% [3] - Several Chinese concept stocks experienced significant declines, with many dropping over 10%, and Sihong International leading the drop at over 30% [4][5] Commodity Market - Precious metals saw a collective rise, with gold nearing historical highs and silver increasing by 3%, reaching a peak of $63.96 per ounce [6] - Platinum futures prices broke above $1,800 per ounce, with a year-to-date increase of nearly 100%, significantly outpacing gold's 65% rise [7] Cryptocurrency Market - Cryptocurrencies faced a sharp decline, with Bitcoin dropping 2.61% below $87,000 and Ethereum falling below $3,000, leading to a total of 140,000 liquidations in the past 24 hours [8][9] Economic Indicators - The US Labor Statistics Bureau is set to release the November employment report and part of October's data, with economists predicting a non-farm employment increase of 50,000 and an unemployment rate of 4.4% [10]