Broadcom (NASDAQ:AVGO) Shares Down 4.8% – Here’s What Happened

Broadcom Inc. (NASDAQ:AVGO)’s stock price dropped 4.8% on Monday . The company traded as low as $343.91 and last traded at $344.72. Approximately 31,572,775 shares changed hands during mid-day trading, an increase of 25% from the average daily volume of 25,225,260 shares. The stock had previously closed at $361.99.

More Broadcom News

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom’s earnings call reinforced the company’s AI growth thesis. CEO Hock Tan said demand for AI infrastructure remains strong, dismissed concerns about an AI slowdown and maintained the company’s long-term AI revenue targets. Broadcom CEO addresses Anthropic’s slowdown push
• Positive Sentiment: Analysts and financial commentators continue to point to accelerating hyperscaler spending on custom AI accelerators, high-bandwidth memory and networking silicon. Piper Sandler estimated that demand for Broadcom’s AI inference ASICs is roughly twice available supply and initiated coverage with an Overweight rating and a $460 price target. Broadcom’s Real Constraint Isn’t Demand. It’s Supply.
• Positive Sentiment: Broadcom recently announced new fourth-quarter revenue guidance, reaffirmed its dividend and completed two share-repurchase authorizations. Supporters argue that buybacks, cash generation and continued AI revenue growth could make the stock undervalued after its pullback. Broadcom Could Be 47% Below Fair Value
• Neutral Sentiment: Investment comparisons remain mixed. Broadcom benefits from custom silicon and AI connectivity exposure, while NVIDIA is viewed by some analysts as having stronger profitability, a broader ecosystem and a more attractive valuation. NVIDIA vs. Broadcom
• Negative Sentiment: Near-term pressure stems from concerns that guidance was underwhelming relative to elevated expectations, along with questions about margins, customer concentration, financing needs and VMware-related regulatory risks. Some analysts also see competing AI infrastructure stocks as offering better valuation or upside.
• Negative Sentiment: Broadcom has also been caught in a broader semiconductor and AI-stock rotation, as investors debate the pace and durability of AI spending ahead of Federal Reserve policy developments. That sector-wide risk is offsetting the company’s strong operational outlook. Marvell Falls as AI Pacing Debate Collides With Fed Week

Analyst Ratings Changes

A number of research analysts have recently issued reports on the stock. Morgan Stanley reiterated an “overweight” rating and set a $505.00 price target (up from $502.00) on shares of Broadcom in a research note on Thursday, September 3rd. Fox Advisors raised Broadcom to an “outperform” rating in a report on Thursday, September 3rd. Oppenheimer restated an “outperform” rating and set a $535.00 target price (up from $450.00) on shares of Broadcom in a research report on Thursday, June 4th. UBS Group downgraded shares of Broadcom from a “buy” rating to a “hold” rating in a report on Thursday, September 3rd. Finally, Zacks Research downgraded shares of Broadcom from a “strong-buy” rating to a “hold” rating in a report on Thursday, May 21st. One research analyst has rated the stock with a Strong Buy rating, twenty-eight have assigned a Buy rating and four have assigned a Hold rating to the stock. According to data from MarketBeat, Broadcom has an average rating of “Moderate Buy” and a consensus price target of $509.04.

Broadcom Trading Down 1.6%

The business has a 50-day moving average of $381.82 and a 200 day moving average of $378.84. The stock has a market cap of $1.62 trillion, a PE ratio of 43.33 and a beta of 1.44. The company has a debt-to-equity ratio of 0.57, a quick ratio of 2.29 and a current ratio of 2.50.

Broadcom (NASDAQ:AVGO) last released its earnings results on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $3.22 by $0.10. Broadcom had a net margin of 42.94% and a return on equity of 48.33%. The company 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 firm earned $1.69 EPS. The firm’s quarterly revenue was up 85.5% on a year-over-year basis. Equities research analysts predict that Broadcom Inc. will post 10.36 EPS for the current fiscal year.

Broadcom Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 30th. Investors of record on Monday, September 21st will be paid a dividend of $0.65 per share. The ex-dividend date of this dividend is Monday, September 21st. This represents a $2.60 annualized dividend and a dividend yield of 0.8%. Broadcom’s dividend payout ratio is presently 33.21%.

Insiders Place Their Bets

In other Broadcom news, Director Gayla Delly sold 1,890 shares of the business’s stock in a transaction 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 completion of the transaction, the director directly owned 31,326 shares in the company, valued at approximately $12,072,413.88. The trade was a 5.69% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, insider Mark Brazeal sold 25,000 shares of the stock in a transaction 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 transaction, the insider directly owned 194,989 shares in the company, valued at approximately $78,254,935.37. This represents a 11.36% decrease in their position. The SEC filing for this sale provides additional information. In the last three months, insiders sold 53,492 shares of company stock valued at $20,840,292. Company insiders own 1.90% of the company’s stock.

Hedge Funds Weigh In On Broadcom

Several institutional investors and hedge funds have recently bought and sold shares of AVGO. Geode Capital Management LLC grew its position in Broadcom by 1.4% during 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 period. Norges Bank acquired a new stake in Broadcom during the 4th quarter worth approximately $24,252,196,000. Bank of America Corp DE increased its position in Broadcom by 4.6% during the 2nd quarter. Bank of America Corp DE now owns 61,423,013 shares of the semiconductor manufacturer’s stock worth $23,202,543,000 after purchasing an additional 2,685,916 shares in the last quarter. Wellington Management Group LLP raised its holdings in Broadcom by 3.8% in the second quarter. Wellington Management Group LLP now owns 51,580,703 shares of the semiconductor manufacturer’s stock valued at $19,484,611,000 after buying an additional 1,892,721 shares during the period. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC lifted its position in Broadcom by 2.9% during the second quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 40,180,530 shares of the semiconductor manufacturer’s stock valued at $15,178,195,000 after buying an additional 1,140,598 shares in the last quarter. Institutional investors and hedge funds own 76.43% of the company’s stock.

About Broadcom

Broadcom Inc (NASDAQ:AVGO) designs, develops and supplies semiconductor and infrastructure software products for businesses, telecommunications providers and other organizations worldwide. Its semiconductor portfolio includes networking and connectivity components, custom application-specific integrated circuits, broadband and wireless communications products, storage adapters, optical components, and industrial solutions.

The company also provides enterprise infrastructure software through businesses including VMware, which offers virtualization and private- and hybrid-cloud solutions; mainframe and enterprise software; and cybersecurity products.