Broadcom (NASDAQ:AVGO) Shares Down 2.7% After Analyst Downgrade

Broadcom Inc. (NASDAQ:AVGO)’s stock price was down 2.7% on Thursday after Truist Financial lowered their price target on the stock from $550.00 to $520.00. Truist Financial currently has a buy rating on the stock. Broadcom traded as low as $342.33 and last traded at $357.16. 59,979,118 shares changed hands during trading, an increase of 138% from the average daily volume of 25,156,137 shares. The stock had previously closed at $367.24.

Several other analysts have also commented on AVGO. Oppenheimer restated an “outperform” rating and set a $535.00 price target (up from $450.00) on shares of Broadcom in a research report on Thursday, June 4th. Raymond James Financial reissued an “outperform” rating and set a $475.00 target price (up from $450.00) on shares of Broadcom in a research note on Thursday. Zacks Research cut Broadcom from a “strong-buy” rating to a “hold” rating in a research report on Thursday, May 21st. Cantor Fitzgerald lifted their price target on Broadcom from $525.00 to $600.00 and gave the company an “overweight” rating in a research note on Thursday. Finally, Fox Advisors raised Broadcom to an “outperform” rating in a report on Thursday. Thirty-one equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company. According to MarketBeat, Broadcom currently has an average rating of “Moderate Buy” and an average target price of $501.77.

Insider Activity at Broadcom

In other news, Director Gayla Delly sold 1,890 shares of the firm’s stock in a transaction that occurred on Wednesday, July 8th. The stock was sold at an average price of $385.38, for a total value of $728,368.20. Following the transaction, the director owned 31,326 shares in the company, valued at $12,072,413.88. This trade represents a 5.69% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this link. Also, insider Mark Brazeal sold 25,000 shares of Broadcom stock in a transaction that occurred on Friday, July 10th. The stock was sold at an average price of $401.33, for a total value of $10,033,250.00. Following the completion of the sale, the insider directly owned 194,989 shares in the company, valued at $78,254,935.37. This represents a 11.36% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last three months, insiders sold 61,644 shares of company stock valued at $24,016,214. 1.90% of the stock is currently owned by company insiders.

Broadcom News Roundup

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: AI semiconductor revenue surged 221% year over year to $16.7 billion and increased 54% sequentially, underscoring strong demand for Broadcom’s custom accelerators and networking products. AVGO Q3 Earnings Beat Estimates, Revenues Rise on Strong AI Demand
• Positive Sentiment: Management raised its long-term AI semiconductor outlook to $115 billion in fiscal 2027 and $230 billion in fiscal 2028, with Anthropic and OpenAI identified as emerging XPU customers. The Path to $230 Billion: Broadcom Outlines the Next Phase of Its AI Growth Story
• Positive Sentiment: Broadcom generated $13.7 billion in free cash flow during the quarter and declared a $0.65-per-share quarterly dividend. Several analysts also raised targets or maintained bullish ratings, including Cantor Fitzgerald, BMO Capital Markets, Rosenblatt and KeyCorp.
• Neutral Sentiment: Management said AI demand could be significantly higher, but data-center deployments remain constrained by land, power, chips and substrates. These constraints may defer revenue recognition while also highlighting persistent demand.
• Neutral Sentiment: Third Point disclosed that it exited its remaining Broadcom position during the second quarter. The sales were relatively small but may add to investor caution around elevated AI-chip valuations.
• Negative Sentiment: The weaker-than-expected fourth-quarter revenue forecast overshadowed the earnings beat and suggested that competition, customer timing and deployment bottlenecks could limit the pace of acceleration. Broadcom forecasts quarterly revenue below estimates
• Negative Sentiment: Investors also remain concerned about concentration among major customers such as Alphabet, as well as Google’s relationship with rival Marvell. With Broadcom valued at a premium multiple, a modest guidance shortfall was enough to trigger selling.

Institutional Investors Weigh In On Broadcom

Hedge funds have recently modified their holdings of the business. MLG Wealth Management DBA Pine Grove Financial Group boosted its position in shares of Broadcom by 18.4% during the 2nd quarter. MLG Wealth Management DBA Pine Grove Financial Group now owns 2,602 shares of the semiconductor manufacturer’s stock worth $975,000 after purchasing an additional 405 shares during the period. Second Line Capital LLC lifted its stake in Broadcom by 239.5% during the 2nd quarter. Second Line Capital LLC now owns 9,937 shares of the semiconductor manufacturer’s stock worth $3,754,000 after acquiring an additional 7,010 shares in the last quarter. Kinetic Wealth Investment Advisors LLC acquired a new position in Broadcom during the 2nd quarter worth about $209,000. Range Advisory LLC boosted its holdings in Broadcom by 54.4% during the 2nd quarter. Range Advisory LLC now owns 13,647 shares of the semiconductor manufacturer’s stock valued at $5,155,000 after acquiring an additional 4,811 shares during the period. Finally, Capital & Planning LLC grew its position in Broadcom by 2.5% in the 2nd quarter. Capital & Planning LLC now owns 4,144 shares of the semiconductor manufacturer’s stock valued at $1,565,000 after acquiring an additional 100 shares in the last quarter. 76.43% of the stock is currently owned by institutional investors and hedge funds.

Broadcom Price Performance

The company has a debt-to-equity ratio of 0.71, a current ratio of 2.24 and a quick ratio of 2.01. The company has a market capitalization of $1.70 trillion, a PE ratio of 59.53, a price-to-earnings-growth ratio of 0.71 and a beta of 1.44. The stock’s 50 day simple moving average is $384.15 and its 200-day simple moving average is $377.14.

Broadcom (NASDAQ:AVGO) last posted its quarterly earnings data on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 EPS for the quarter, beating the consensus estimate of $3.22 by $0.10. The business had revenue of $29.59 billion during the quarter, compared to analyst estimates of $29.43 billion. Broadcom had a net margin of 38.85% and a return on equity of 41.61%. The business’s revenue for the quarter was up 85.5% compared to the same quarter last year. During the same quarter last year, the firm posted $1.69 earnings per share. As a group, equities analysts forecast that Broadcom Inc. will post 10.24 earnings per share for the current fiscal year.

Broadcom Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, September 30th. Shareholders of record on Monday, September 21st will be given a $0.65 dividend. This represents a $2.60 annualized dividend and a yield of 0.7%. The ex-dividend date of this dividend is Monday, September 21st. Broadcom’s dividend payout ratio (DPR) is currently 43.33%.

About Broadcom

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.