Watch These Stocks: Broadcom, Costco, Gap and More

The exponential growth in anything related to artificial intelligence is a tailwind for Broadcom (AVGO). Yet the stock dipped by 3% in extended trading after posting results.

Broadcom earned $10.99 a share. Revenue grew by 34.1% Y/Y to $11.96 billion. For FY 2024, the firm is forecasting revenue of around $50.0 billion, matching consensus estimates. Other than more customers abandoning VMware after Broadcom bought it, the results and outlook indicate no concerns.

AVGO stock needs a share split. This would entice more retail investors to buy the stock. It would increase option-trading volume and raise awareness of Broadcom’s business strength.

In the retail sector, Costco (COST) lost 4% after reporting $3.71 a share in EPS. The reaction will put an end to the stock’s nearly impossible pre-earnings run-up. COST stock traded in a range last year at below $575. By late Dec. 2023, the stock marched from $650 to $785.59.

In the apparel sector, The Gap (GPS) is a very well-run firm. The stock doubled in value since late last year. It will add around 5.6% this morning after it posted a $1.43 non-GAAP EPS. The revenue headwind is slowing. After revenue fell by 4.7% Y/Y to $14.89 billion in Q4/2023, it expects net sales flat in Q1. In 2024, net sales will match last year’s levels.

Above all else, the market will digest the U.S. non-farm payrolls report. Next week, the market and the Federal Reserve will review the inflation report. This will set the market’s direction for the rest of the month.

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