Broadcom (NASDAQ:AVGO) Trading Down 7.9% – What’s Next?

Broadcom Inc. (NASDAQ:AVGO) shares dropped 7.9% during trading on Friday . The company traded as low as $385.59 and last traded at $385.73. Approximately 50,495,264 shares changed hands during mid-day trading, an increase of 98% from the average daily volume of 25,562,018 shares. The stock had previously closed at $418.91.

More Broadcom News

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Multiple analysts remain bullish, including JPMorgan, Bank of America, Mizuho, Benchmark, Truist, TD Cowen, Rosenblatt and others, with several raising price targets after the earnings report, signaling Wall Street still sees meaningful upside. Analyst target updates
• Positive Sentiment: Broadcom said AI semiconductor revenue reached $10.8 billion in the quarter, more than doubling year over year, and it guided Q3 revenue to about $29.4 billion, showing the business is still growing rapidly. Broadcom Q2 results press release
• Positive Sentiment: Several upbeat commentaries argued the selloff is more about valuation and investor expectations than fundamentals, with some pointing to Broadcom’s strong AI custom silicon demand and long-term growth story. AI trade commentary
• Neutral Sentiment: Broadcom also declared a quarterly dividend of $0.65 per share, which supports the stock’s income appeal but is not the main driver of trading today. Dividend announcement
• Negative Sentiment: Investors sold the stock because Broadcom’s AI revenue guidance and overall outlook were seen as too modest relative to very high expectations, sparking a broader semiconductor selloff that also hit AMD, Intel, Micron and Marvell. Reuters Broadcom selloff report
• Negative Sentiment: Broadcom’s software revenue and near-term AI guidance were viewed as not enough to justify the stock’s premium valuation, leading to a sharp reset in sentiment and dragging down the broader chip group. Broadcom rout and semiconductor selloff

Analysts Set New Price Targets

A number of equities research analysts have recently issued reports on AVGO shares. Susquehanna reaffirmed a “positive” rating and issued a $490.00 target price (up from $450.00) on shares of Broadcom in a report on Thursday, May 28th. DA Davidson boosted their price target on Broadcom from $375.00 to $400.00 and gave the stock a “neutral” rating in a research report on Thursday. Zacks Research downgraded Broadcom from a “strong-buy” rating to a “hold” rating in a research note on Thursday, May 21st. KeyCorp reissued an “overweight” rating and set a $575.00 target price (up from $500.00) on shares of Broadcom in a report on Thursday. Finally, Wells Fargo & Company restated an “overweight” rating and issued a $545.00 price target (up from $430.00) on shares of Broadcom in a research note on Thursday, May 14th. One analyst has rated the stock with a Strong Buy rating, twenty-nine have assigned a Buy rating and three have given a Hold rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and a consensus price target of $490.13.

Broadcom Stock Down 7.9%

The firm has a 50-day moving average price of $394.88 and a 200 day moving average price of $361.73. The company has a debt-to-equity ratio of 0.80, a current ratio of 1.90 and a quick ratio of 1.73. The company has a market cap of $1.83 trillion, a price-to-earnings ratio of 64.29, a P/E/G ratio of 0.99 and a beta of 1.41.

Broadcom (NASDAQ:AVGO) last released its quarterly earnings results on Wednesday, June 3rd. The semiconductor manufacturer reported $2.44 earnings per share for the quarter, topping the consensus estimate of $2.40 by $0.04. The business had revenue of $22.19 billion during the quarter, compared to analysts’ expectations of $22.13 billion. Broadcom had a return on equity of 42.88% and a net margin of 38.85%.The firm’s revenue for the quarter was up 47.9% compared to the same quarter last year. During the same period last year, the firm posted $1.58 EPS. Sell-side analysts predict that Broadcom Inc. will post 9.89 EPS for the current year.

Broadcom Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Tuesday, June 30th. Stockholders of record on Monday, June 22nd will be given a dividend of $0.65 per share. This represents a $2.60 dividend on an annualized basis and a dividend yield of 0.7%. The ex-dividend date is Monday, June 22nd. Broadcom’s dividend payout ratio is presently 43.33%.

Insider Activity at Broadcom

In related news, insider Mark David Brazeal sold 50,488 shares of the company’s stock in a transaction dated Tuesday, March 17th. The shares were sold at an average price of $321.60, for a total transaction of $16,236,940.80. Following the completion of the sale, the insider owned 278,141 shares of the company’s stock, valued at $89,450,145.60. This represents a 15.36% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. Also, insider S. Ram Velaga sold 8,000 shares of the stock in a transaction dated Friday, April 10th. The stock was sold at an average price of $370.52, for a total transaction of $2,964,160.00. Following the sale, the insider owned 57,932 shares in the company, valued at $21,464,964.64. The trade was a 12.13% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 324,282 shares of company stock worth $106,425,249 in the last quarter. 1.90% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Broadcom

Several hedge funds and other institutional investors have recently made changes to their positions in AVGO. Vanguard Group Inc. raised its holdings in shares of Broadcom by 0.8% during the 4th quarter. Vanguard Group Inc. now owns 482,707,302 shares of the semiconductor manufacturer’s stock worth $167,064,997,000 after buying an additional 3,919,715 shares in the last quarter. State Street Corp grew its position in Broadcom by 2.7% in the fourth quarter. State Street Corp now owns 190,084,351 shares of the semiconductor manufacturer’s stock valued at $65,788,194,000 after acquiring an additional 5,040,801 shares during the last quarter. Geode Capital Management LLC grew its position in Broadcom by 1.4% in the fourth quarter. Geode Capital Management LLC now owns 111,277,280 shares of the semiconductor manufacturer’s stock valued at $38,396,634,000 after acquiring an additional 1,548,699 shares during the last quarter. Price T Rowe Associates Inc. MD raised its stake in Broadcom by 3.0% during the fourth quarter. Price T Rowe Associates Inc. MD now owns 85,546,083 shares of the semiconductor manufacturer’s stock worth $29,607,500,000 after acquiring an additional 2,491,644 shares in the last quarter. Finally, Norges Bank bought a new position in shares of Broadcom in the fourth quarter worth about $24,252,196,000. 76.43% of the stock is currently owned by institutional investors and hedge funds.

Broadcom Company Profile

Broadcom Inc (NASDAQ: AVGO) is a global technology company that designs, develops and supplies semiconductor and infrastructure software solutions for a broad range of markets. The company’s semiconductor business provides components and systems for wired and wireless communications, enterprise and cloud storage, networking and broadband access, serving original equipment manufacturers, cloud service providers, telecommunications carriers and industrial customers worldwide. Broadcom is headquartered in Irvine, California, and operates globally with research, development and sales organizations across North America, Europe and Asia.

On the semiconductor side, Broadcom’s portfolio includes system-on-chip (SoC) and application-specific integrated circuit (ASIC) solutions, radio-frequency and connectivity components, Ethernet switching and PHY devices, storage adapters and controllers, optical transceivers and other networking silicon.