Broadcom (NASDAQ:AVGO) Raised to "Buy" at Erste Group Bank

Key Points

• Erste Group Bank upgraded Broadcom from hold to buy, adding to a generally positive analyst backdrop that includes an average Moderate Buy rating and an average price target of about $490.13.
• Broadcom just reported strong quarterly results, with EPS of $2.44 beating estimates and revenue of $22.19 billion topping forecasts, while sales jumped 47.9% year over year.
• Despite the earnings beat, the stock is under pressure and was noted as down 12.6%, as investors reacted to AI revenue guidance that fell short of the market’s highest expectations even though analysts remain bullish on long-term growth.

Broadcom (NASDAQ:AVGO - Get Free Report) was upgraded by equities researchers at Erste Group Bank from a "hold" rating to a "buy" rating in a research report issued to clients and investors on Friday.

Other research analysts have also recently issued reports about the stock. KeyCorp reiterated an "overweight" rating and issued a $575.00 target price (up from $500.00) on shares of Broadcom in a report on Thursday. Wall Street Zen cut shares of Broadcom from a "buy" rating to a "hold" rating in a report on Saturday, May 30th. Rosenblatt Securities reiterated a "buy" rating and issued a $500.00 target price on shares of Broadcom in a report on Thursday. Seaport Research Partners reiterated a "neutral" rating on shares of Broadcom in a report on Wednesday, April 8th. Finally, UBS Group set a $485.00 price target on shares of Broadcom and gave the stock a "buy" rating in a report on Thursday. One equities research analyst has rated the stock with a Strong Buy rating, twenty-nine have given a Buy rating and three have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and an average target price of $490.13.

Broadcom Stock Down 12.6%

Broadcom stock opened at $418.91 on Friday. The company's 50-day moving average price is $394.88 and its two-hundred day moving average price is $361.73. The stock has a market cap of $1.98 trillion, a price-to-earnings ratio of 69.82, a PEG ratio of 0.99 and a beta of 1.41. The company has a current ratio of 1.90, a quick ratio of 1.73 and a debt-to-equity ratio of 0.80. Broadcom has a 52 week low of $241.11 and a 52 week high of $495.00.

Broadcom (NASDAQ:AVGO - Get Free Report) last announced its quarterly earnings data on Wednesday, June 3rd. The semiconductor manufacturer reported $2.44 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.40 by $0.04. The company had revenue of $22.19 billion for the quarter, compared to analysts' expectations of $22.13 billion. Broadcom had a net margin of 38.85% and a return on equity of 42.88%. The business's revenue was up 47.9% compared to the same quarter last year. During the same quarter in the previous year, the company posted $1.58 EPS. On average, analysts expect that Broadcom will post 9.89 EPS for the current fiscal year.

Insider Activity at Broadcom

In related news, insider S. Ram Velaga sold 38,841 shares of the business's stock in a transaction on Tuesday, March 17th. The shares were sold at an average price of $321.60, for a total transaction of $12,491,265.60. Following the transaction, the insider owned 96,147 shares of the company's stock, valued at approximately $30,920,875.20. The trade was a 28.77% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, insider Mark David Brazeal sold 50,488 shares of the business's stock in a transaction on Tuesday, March 17th. The stock was sold at an average price of $321.60, for a total transaction of $16,236,940.80. Following the transaction, the insider directly owned 278,141 shares in the company, valued at $89,450,145.60. This trade represents a 15.36% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last ninety days, insiders sold 324,282 shares of company stock worth $106,425,249. 1.90% of the stock is owned by insiders.

Institutional Investors Weigh In On Broadcom

Several institutional investors and hedge funds have recently bought and sold shares of the business. ROSS JOHNSON & Associates LLC grew its holdings in shares of Broadcom by 1,320.0% in the 4th quarter. ROSS JOHNSON & Associates LLC now owns 71 shares of the semiconductor manufacturer's stock worth $25,000 after purchasing an additional 66 shares during the last quarter. Networth Advisors LLC grew its holdings in shares of Broadcom by 546.2% in the 1st quarter. Networth Advisors LLC now owns 84 shares of the semiconductor manufacturer's stock worth $26,000 after purchasing an additional 71 shares during the last quarter. SWAN Capital LLC grew its holdings in shares of Broadcom by 261.9% in the 4th quarter. SWAN Capital LLC now owns 76 shares of the semiconductor manufacturer's stock worth $26,000 after purchasing an additional 55 shares during the last quarter. Miller Global Investments LLC bought a new stake in shares of Broadcom in the 4th quarter worth about $31,000. Finally, Nvest Wealth Strategies Inc. bought a new stake in shares of Broadcom in the 4th quarter worth about $33,000. Institutional investors own 76.43% of the company's stock.

Key Broadcom News

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom posted record Q2 revenue of about $22.2 billion, up 48% year over year, with non-GAAP EPS of $2.44 beating estimates and free cash flow remaining exceptionally strong. Broadcom Inc. Announces Second Quarter Fiscal Year 2026 Financial Results and Quarterly Dividend
• Positive Sentiment: AI semiconductor revenue more than doubled to $10.8 billion, reinforcing that Broadcom remains a key beneficiary of the AI infrastructure buildout. Broadcom Revenue Climbs on AI Chip Demand
• Positive Sentiment: Several analysts raised price targets after the report, including JPMorgan, Bank of America, Mizuho, and Benchmark, signaling that Wall Street still sees upside despite the selloff. Analyst price target updates
• Neutral Sentiment: Broadcom guided third-quarter revenue to roughly $29.4 billion, above consensus, and reiterated a long-term AI revenue target of more than $100 billion by fiscal 2027. Some investors viewed that outlook as solid, but not aggressive enough to justify the stock’s premium valuation. Reuters article on Broadcom revenue and AI outlook
• Negative Sentiment: AVGO sold off sharply because the company’s AI revenue guidance came in below the market’s loftiest expectations, sparking concerns that the AI trade may be cooling or that the stock had simply gotten too expensive. Broadcom: AI guidance gap reveals the cost of sky-high expectations
• Negative Sentiment: The selloff in Broadcom also dragged down other semiconductor names and weighed on the Nasdaq, showing that investors are repricing the broader AI chip group after the earnings report. Micron, Marvell, and Broadcom lead chipmakers' premarket losses

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.

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