It was a similar story for both Costco and Broadcom on Thursday. Both companies beat earnings expectations, but saw their prices fall slightly. That said, investors should be happy with the fact that Costco is up nearly 52% year to date, while Broadcom is up nearly 66% as of Thursday’s close (with an after-hours gain of 10% at press time).
Costco highlighted gold (yes, Costco sells gold bars), home furnishings, sporting goods and hardware as key growth areas. E-commerce sales were up 13% year over year.
Broadcom has been focusing on the development of its own custom AI chip. That’s probably a good entry point, considering how AI revenue is increasing 220% year over year! Broadcom CEO Hock Tan said, “We see an opportunity in the next three years in AI. Some large hyperscalers have already started their journey to develop custom AI accelerators. “
To compare US tech companies (like Oracle) to their Canadian counterparts, check out my article on the best tech stocks in Canada on MillionDollarJourney.com.
The best online retailers, rated and compared
The US economy not the US Stock Market
It is reasonable, at first glance, to think that the value of a country’s largest companies (measured by the market capitalization of the stock market) may be directly linked to its economic performance (measured by GDP).
But remember, the stock market is not the economy! The US has a large economy, but it has a very large share of the world’s investment dollars.
Large national companies can sell products and services outside their country’s borders. Currently, investors are willing to pay more for the same dividend from an American company than for companies in many other parts of the world. That is due to many factors. But chief among them is the idea that American companies are the best long-term bet to increase profits relative to companies operating elsewhere.
Interestingly, investors seem more confident in America’s ability to continue making money, despite widespread concerns about the US recession and speculation that the US dollar will be in trouble any day now.
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