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Investing.com -- Broadcom Inc. (NASDAQ:AVGO) stock rose 4% in after-hours trading following the company's announcement of a new $10 billion share repurchase authorization. The move comes as a welcome development for shareholders after the stock experienced a 21% decline this month amidst a broader tech sector downturn.
The repurchase program, which is set to run through December 31, 2025, signals the Board's confidence in Broadcom's diversified portfolio in semiconductor and infrastructure software products. Hock Tan, President and CEO of Broadcom, highlighted the company's strategic positioning in mission-critical infrastructure software and its role in driving generative AI innovation for hyperscalers.
Kirsten Spears, CFO of Broadcom, emphasized that the repurchase program reflects the Board's belief in the company's ability to generate strong cash flow and its commitment to delivering shareholder value. The repurchase of shares will be conducted through various methods, which may include open market or privately negotiated transactions, subject to stock price, business and market conditions, and other influencing factors.
Broadcom has clarified that there is no obligation to repurchase any specific number of shares and that the program can be suspended or terminated at any time. The company's decision to authorize such a significant buyback underscores its financial stability and optimistic outlook on its future performance.
Investors have responded positively to the announcement, viewing the buyback as a sign of the company's strong financial health and a means to potentially enhance earnings per share. The stock's uptick in after-hours trading reflects the market's initial reaction to the news, although future performance will depend on a variety of market conditions and company developments.
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