Broadcom Tests Negative for Coronavirus, and Bludgeoned Shares Look Like a Deal
Late last week, chipmaking and enterprise software giant Broadcom (NASDAQ: AVGO) reported fiscal 2020 first-quarter results (for the three months ended Feb. 2, 2020) that were slightly below expectations but free of coronavirus disruption. What has turned into a broad panic on Wall Street in the past few weeks actually started out as worry that the illness's origin in China would create a supply shock to the global economy. Nevertheless, in spite of China's lockdown to contain the spread of COVID-19 (including manufacturing facility closures and subsequent cancellation of some shipments of goods), Broadcom said all was looking OK at the moment.
Despite that level assessment on its current situation, the big tech outfit did withdraw its full-year 2020 guidance due to the evolving situation, opting instead to provide an outlook for the second quarter. After an initial steep pullback, the stock rallied with the rest of the market on Friday afternoon to end an ugly week for Wall Street. However, Broadcom shares are down nearly 30% from all-time highs registered just a month ago. It's anyone's guess where the market decides to go next, but Broadcom's sell-off is looking way overblown given the information available at the moment.
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Source Fool.com