Workflow
2 Stock-Split Stocks Billionaires Are Piling Into for 2025
AVGOBroadcom(AVGO) The Motley Fool·2024-12-23 10:21

Stock Split Stocks and Billionaire Interest - Billionaires are heavily investing in two prominent stock-split stocks as 2025 approaches [1] - Stock splits adjust share prices and outstanding share counts without affecting market cap or operating performance [3] - Forward stock splits are favored by investors as they make shares more affordable for retail investors [9] - Companies completing forward splits tend to out-innovate competitors, often reflected in rising share prices [18] Broadcom (AVGO) - Broadcom is a leading company in AI-networking solutions and completed a 10-for-1 stock split in mid-July [6] - In fiscal 2024, Broadcom generated 12.2billioninAIsales,withCEOHockTanforecasting12.2 billion in AI sales, with CEO Hock Tan forecasting 60 billion to 90billioninAIchipspendingbyitstophyperscalecustomersoverthenextthreeyears[7]−Broadcom′sAI−networkingsolutions,includingtheJericho3−AIfabric,arepreferredbybusinessesforconnectingupto32,000GPUstomaximizecomputingcapabilitiesandminimizelatency[11]−BeyondAI,Broadcomgeneratessignificantrevenuefromwirelesschipsfornext−gensmartphones,cybersecuritysolutions,andindustrialopticalcomponentsandsensors[15]−BillionairePhilippeLaffontofCoatueManagementpurchased1,488,666sharesofBroadcominQ32024,whileStanleyDruckenmilleropenedanewpositionof239,980shares[14]SuperMicroComputer(SMCI)−SuperMicroComputer,acustomizablerackserverandstorage−solutionscompany,completeda10−for−1stocksplitattheendofSeptember[16]−Thecompanyreported90 billion in AI chip spending by its top hyperscale customers over the next three years [7] - Broadcom's AI-networking solutions, including the Jericho3-AI fabric, are preferred by businesses for connecting up to 32,000 GPUs to maximize computing capabilities and minimize latency [11] - Beyond AI, Broadcom generates significant revenue from wireless chips for next-gen smartphones, cybersecurity solutions, and industrial optical components and sensors [15] - Billionaire Philippe Laffont of Coatue Management purchased 1,488,666 shares of Broadcom in Q3 2024, while Stanley Druckenmiller opened a new position of 239,980 shares [14] Super Micro Computer (SMCI) - Super Micro Computer, a customizable rack server and storage-solutions company, completed a 10-for-1 stock split at the end of September [16] - The company reported 15 billion in net sales for fiscal 2024, representing 110% growth from the previous year, with Wall Street forecasting sales to double to $30 billion by fiscal 2026 [4] - Super Micro's customizable rack servers incorporate Nvidia's GPUs, enhancing demand for its products [8] - Philippe Laffont of Coatue Management purchased 241,610 shares of Super Micro in Q3 2024, aligning with his focus on cutting-edge growth stocks [23] - However, the company faces scrutiny due to allegations of accounting manipulation and sanctions evasion, leading to delays in filing its fiscal 2024 annual report and the resignation of its accounting firm [21][17] AI and Market Performance - AI has been the top catalyst for Wall Street's outperformance in 2024, with investor enthusiasm for stock-split stocks playing a significant role [5] - Two of Wall Street's hottest AI stocks, Broadcom and Super Micro Computer, are on the buy lists of top money managers [13] - If an AI bubble were to burst, Broadcom is better positioned than direct players like Nvidia to handle the fallout [25] Market Overview - As of Dec 19, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite gained 12%, 23%, and 29% year-to-date, respectively [22]