Just a discussion about how much this stock can perform in the future.
I'm deciding if it's better to keep it or divest and put everything on my diversified S&P 500 ETF (on accumulation base)
This stock is mainly driven by earnings, dividend and P/E ratio.
This company is for sure not viewed as a Nvidia, Tesla or some high tech and futuristic visionary company, not even as a FAANG type company, but just a driven high revenue and high earning stock, but at the moment in the last months it gained also some attention due to AI.
At the moment the total capitalization is about 400B$ with a P/E about 30 and a dividend just above 2%.
Comparing to other competitors/similar companies like TSMC P/E 16 (but not American), Qualcomm P/E 20 (which is even gaining a lot of momentum for the new SnapDragons CPUS) and Intel (ok not in its best moment) P/E forward about 20, Avago seems quite over evaluated at the moment.
To continue grow it will need an increase of earnings to keep its P/E at a sustainable level and push the dividend up.
How much this is sustainable even with VMware acquisition?
The semiconductor division seems at its maximum, difficult to expand...
I think VMW could increase total earnings of a few billions (3?) $ yearly not more (with due cuts)