Broadcom (NASDAQ:AVGO) Stock Falls 4.3% – Should You Sell?

Broadcom Inc. (NASDAQ:AVGO)’s share price fell 4.3% during mid-day trading on Thursday. The company traded as low as $357.41 and last traded at $360.14. Approximately 26,023,969 shares traded hands during mid-day trading, an increase of 4% from the average daily volume of 25,123,166 shares. The stock had previously closed at $376.51.

Key Stories Impacting Broadcom

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom is reportedly arranging more than $50 billion in financing for custom AI chips being developed with OpenAI. Although discussions are preliminary, the potential project underscores the scale of expected demand for Broadcom’s custom silicon and could support substantial future revenue. Broadcom seeks more than $50 billion to finance OpenAI AI chips
• Positive Sentiment: At the OCP Global Summit, Broadcom highlighted new networking technologies designed to help hyperscalers scale AI clusters. The announcements reinforce its positioning in high-speed networking and custom AI infrastructure. Broadcom AI networking innovations
• Positive Sentiment: Record profits at Samsung and TSMC are being viewed as evidence that semiconductor demand and AI-related capital spending remain strong, a favorable backdrop for Broadcom’s chip and networking businesses. Record profits at Samsung and TSMC
• Positive Sentiment: Analysts and commentators continue to point to Broadcom’s rapid AI revenue growth and its roughly 24% decline from its 52-week high as a potential entry point, despite expectations for strong earnings growth. Broadcom is lagging the market

Analysts Set New Price Targets

A number of equities research analysts recently commented on AVGO shares. UBS Group cut shares of Broadcom from a “buy” rating to a “hold” rating in a research report on Thursday, September 3rd. TD Cowen reaffirmed a “buy” rating and set a $475.00 price target (down from $500.00) on shares of Broadcom in a research report on Thursday, September 3rd. Rosenblatt Securities started coverage on Broadcom in a research report on Thursday, September 3rd. They issued a “buy” rating and a $600.00 price objective for the company. Fox Advisors upgraded Broadcom to an “outperform” rating in a research note on Thursday, September 3rd. Finally, JPMorgan Chase & Co. reiterated a “buy” rating on shares of Broadcom in a research note on Thursday, September 3rd. One analyst has rated the stock with a Strong Buy rating, thirty-seven have given a Buy rating and three have issued a Hold rating to the company. According to data from MarketBeat, Broadcom presently has a consensus rating of “Moderate Buy” and a consensus target price of $527.20.

Broadcom Trading Up 0.4%

The company has a current ratio of 2.50, a quick ratio of 2.29 and a debt-to-equity ratio of 0.57. The stock has a 50-day simple moving average of $371.24 and a 200 day simple moving average of $382.38. The company has a market cap of $1.73 trillion, a price-to-earnings ratio of 46.17 and a beta of 1.46.

Broadcom (NASDAQ:AVGO) last announced its quarterly earnings data on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 earnings per share for the quarter, beating analysts’ consensus estimates of $3.22 by $0.10. Broadcom had a return on equity of 48.33% and a net margin of 42.94%. The business had revenue of $29.59 billion for the quarter, compared to analyst estimates of $29.24 billion. During the same period in the prior year, the company earned $1.69 earnings per share. The company’s revenue was up 85.5% on a year-over-year basis. As a group, equities research analysts predict that Broadcom Inc. will post 10.37 EPS for the current fiscal year.

Broadcom Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Wednesday, September 30th. Stockholders of record on Monday, September 21st were paid a $0.65 dividend. The ex-dividend date was Monday, September 21st. This represents a $2.60 dividend on an annualized basis and a dividend yield of 0.7%. Broadcom’s dividend payout ratio is presently 33.21%.

Institutional Inflows and Outflows

Several institutional investors have recently made changes to their positions in the business. Cornerstone Advisors LLC purchased a new stake in Broadcom during the 2nd quarter worth about $92,522,000. GAMMA Investing LLC increased its stake in shares of Broadcom by 8.8% during the third quarter. GAMMA Investing LLC now owns 164,015 shares of the semiconductor manufacturer’s stock worth $55,889,000 after buying an additional 13,317 shares during the period. Bank of America Corp DE increased its stake in shares of Broadcom by 1.5% during the first quarter. Bank of America Corp DE now owns 58,737,097 shares of the semiconductor manufacturer’s stock worth $18,179,719,000 after buying an additional 894,564 shares during the period. Clear Harbor Asset Management LLC purchased a new position in Broadcom in the second quarter worth approximately $3,302,000. Finally, Bartlett & CO. Wealth Management LLC grew its holdings in Broadcom by 129.3% during the 1st quarter. Bartlett & CO. Wealth Management LLC now owns 110,048 shares of the semiconductor manufacturer’s stock worth $34,061,000 after acquiring an additional 62,050 shares in the last quarter. Hedge funds and other institutional investors own 76.43% of the company’s stock.

About Broadcom

Broadcom Inc (NASDAQ: AVGO) is a global technology company that designs, develops, and supplies semiconductor and infrastructure software products. Its semiconductor solutions support wired and wireless communications, data center networking, broadband access, storage, industrial applications, and other markets.

The company’s semiconductor portfolio includes networking and switching products, custom application-specific integrated circuits, wireless connectivity components, radio-frequency devices, optical components, and storage-related solutions.