The stock market’s tepid reaction to Broadcom’s (AVGO) strong results is an ominous sign.
Broadcom posted a non-GAAP EPS of $3.32 in the third quarter. Revenue grew by an astounding 85.5% Y/Y to $29.59 billion. CEO Hock Tan said that the firm experienced strong demand for its custom AI accelerators and networking. Its AI chip revenue of $16.7 billion is up by 221% Y/Y.
For Q4, Broadcom is guiding revenue of around $34.8 billion. AVGO stock initially fell by 4% in after-hours trading. Expect shares to open flat to slightly below 1%.
Uber (UBER) announced a 10% cut in its workforce. CEO Dara Khosrowshahi said the firm needed the cuts to make the company simpler and faster. It would cut redundant management layers.
UBER stock added 1.61% on Wednesday to close at $76.45. It faces meaningful competition for self-driving taxi services. Tesla (TSLA) is about to announce Cybertruck developments for the second time.
J&J (JNJ) traded at an all-time high yesterday of $281.07 but closed at $275.21. Should the firm accelerate its growth, the stock’s P/E multiples would expand. That would imply a higher price target.
Investors unwilling to pay a premium on JNJ stock might consider Pfizer (PFE) and Bristol-Myers (BMY). Alternatively, AbbVie (ABBV), Merck (MRK), and Novartis (NVO) offer strong profits, but shares also trade at a premium P/E ratio.
