AVGO Stock Split: Will it Happen Again

AVGO Stock Split: Will it Happen Again

Broadcom Inc. (NASDAQ: AVGO) has emerged as one of the most influential companies in the semiconductor and infrastructure software industry. Its chips power everything from smartphones to data centres, and more recently, the company has become a leading force in artificial intelligence. In July 2024, Broadcom carried out a 10-for-1 stock split, making shares far more accessible to retail investors and employees alike. Since then, the stock has continued to attract attention, with speculation about whether another AVGO stock split could be on the horizon.

The 2024 AVGO Stock Split

On July 15, 2024, Broadcom shareholders received ten shares for every one previously held. While this did not change the total value of investors’ holdings, it reduced the share price from over $1,700 to around $170, increasing accessibility and boosting liquidity.

The split was not just a cosmetic move. It also reinforced management’s confidence in Broadcom’s growth trajectory. By the end of 2024, the company’s market capitalisation had passed $1 trillion, driven by demand for AI-focused semiconductors, cloud infrastructure solutions, and the successful integration of VMware following its $69 billion acquisition.

AVGO Stock Split History

Broadcom has rarely turned to stock splits. Before the 2024 event, the last occurred in 2006, when the company, then trading as Broadcom Corp. (BRCM), executed a 3-for-2 split. The July 2024 split was the first under the AVGO ticker since Avago Technologies acquired Broadcom in 2016, marking a landmark event in its corporate journey.

Broadcom’s Post-Split Performance

After adjustment, Broadcom shares stabilised around $170, with trading ranging between $180 and $250 due to market fluctuations. In December 2024, the stock jumped from roughly $180 to $250 when Broadcom reported that AI revenue accounted for 35% of semiconductor sales, surpassing its 25% target and exceeding expectations by approximately $10 billion.

Financial results reinforced the momentum:

Q4 2024:

• Revenue: $14.05 billion (+51% YoY)
• Net income: $4.32 billion
• Non-GAAP earnings per share: outperformed expectations

Q1 Fiscal Year 2025:

• Revenue: $14.916 billion (+25% YoY)
• AI semiconductor and infrastructure software drove results:
  • Infrastructure software revenue: $6.7 billion (+47% YoY)
• Strong cash generation with $6.013 billion in free cash flow and an operating margin above 65%

Growth Drivers: AI, Partnerships, and Software

AI continues to be the backbone of Broadcom’s growth. Partnerships with major clients such as Apple and OpenAI have positioned the company as a key supplier in the evolving AI ecosystem. Analysts project that AI-related opportunities could reach between $60 billion and $90 billion by 2027, further expanding Broadcom’s revenue potential.

Beyond semiconductors, Broadcom’s infrastructure software division has also been accelerating, benefiting from acquisitions and a shift toward higher-margin recurring revenue. Together, these segments give the company a balanced growth model.

Dividends and Financial Strength

While Broadcom is known for growth, it is equally a dividend powerhouse. Since 2016, its dividend has compounded at an annual rate of about 32%, turning modest yields into meaningful long-term returns for investors who reinvest payouts. Some shareholders now enjoy double-digit yields on cost, illustrating the power of Broadcom’s dividend growth.

At the same time, Broadcom has significantly increased research and development spending to secure future innovation. Despite these higher expenses, gross profit margins remain strong, averaging over 60% in 2024 compared with the mid-40s a decade ago.

Will AVGO Stock Split Again in 2025?

For now, another split in 2025 appears unlikely. The 2024 adjustment already made shares affordable, with AVGO currently trading below $200. Historically, companies split their stock when prices become prohibitively high, and Broadcom’s valuation does not pose that challenge today.

Management’s focus is instead on integrating VMware, strengthening its AI leadership, and sustaining growth in infrastructure software. Analysts agree that the fundamentals, not the prospect of another split, are what make AVGO a compelling investment.

Analyst Sentiment and Market Outlook

Historically, companies that split their stock see an average gain of more than 25% in the following year. Since Broadcom’s announcement, shares are up around 3%, but analysts remain optimistic. With projected annual earnings growth of 17–20% and continued free cash flow expansion, many believe the stock is well-positioned to deliver further returns.

Conclusion

The AVGO 10-for-1 stock split in July 2024 was a turning point for Broadcom, lowering the entry barrier for investors and underscoring its rise as a trillion-dollar tech leader. While another split in 2025 looks unlikely, the company’s real strength lies in its fundamentals: explosive AI-driven growth, robust software revenues, healthy cash flow, and consistent dividend expansion.

For investors, AVGO remains a stock to watch. Not just for structural moves like stock splits, but for its ability to deliver sustainable growth in one of the most dynamic sectors of the global economy.