Broadcom (NASDAQ:AVGO) Shares Down 3.1% on Analyst Downgrade

Key Points

• Broadcom shares fell 3.1% after Wall Street Zen downgraded the stock from strong-buy to buy, with trading volume running above average during the session.
• Despite the pullback, broader analyst sentiment remains positive: Broadcom still carries a Moderate Buy consensus, and the average price target stands at about $490.13.
• The company continues to show strong fundamentals, including a recent earnings beat and 47.9% year-over-year revenue growth, while investors also remain focused on its AI-driven growth and recent quarterly dividend of $0.65 per share.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report) shares traded down 3.1% during mid-day trading on Tuesday after Wall Street Zen downgraded the stock from a strong-buy rating to a buy rating. The company traded as low as $376.66 and last traded at $380.15. Approximately 32,303,850 shares were traded during trading, an increase of 22% from the average session volume of 26,432,795 shares. The stock had previously closed at $392.13.

A number of other equities analysts also recently weighed in on the stock. Jefferies Financial Group set a $550.00 price target on shares of Broadcom and gave the stock a "buy" rating in a report on Thursday, June 4th. Zacks Research downgraded shares of Broadcom from a "strong-buy" rating to a "hold" rating in a report on Thursday, May 21st. Mizuho lifted their price objective on shares of Broadcom from $480.00 to $530.00 and gave the stock an "outperform" rating in a research report on Thursday, June 4th. Morgan Stanley set a $502.00 target price on shares of Broadcom and gave the company an "overweight" rating in a research note on Thursday, June 4th. Finally, Citigroup reissued a "buy" rating on shares of Broadcom in a research report on Thursday, June 4th. One investment analyst has rated the stock with a Strong Buy rating, twenty-nine have assigned a Buy rating and three have issued a Hold rating to the stock. According to data from MarketBeat.com, Broadcom presently has an average rating of "Moderate Buy" and a consensus price target of $490.13.

Insiders Place Their Bets

In other Broadcom news, insider S. Ram Velaga sold 17,260 shares of the business's stock in a transaction on Thursday, April 9th. The shares were sold at an average price of $352.12, for a total transaction of $6,077,591.20. Following the sale, the insider owned 65,932 shares of the company's stock, valued at $23,215,975.84. The trade was a 20.75% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, Director Harry L. You bought 1,000 shares of the company's stock in a transaction on Thursday, June 11th. The shares were bought at an average price of $373.57 per share, for a total transaction of $373,570.00. Following the transaction, the director owned 38,466 shares of the company's stock, valued at approximately $14,369,743.62. This represents a 2.67% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Insiders sold 59,385 shares of company stock worth $21,301,057 in the last three months. Insiders own 1.90% of the company's stock.

Key Stories Impacting Broadcom

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom continues to benefit from surging AI demand, with reports highlighting record semiconductor sales, strong bookings, and customer commitments tied to its AI chips and networking gear. Broadcom's AI Push Boosts Semiconductor Sales: More Upside Ahead?
• Positive Sentiment: JPMorgan reportedly sees the recent pullback as a buying opportunity, pointing to Broadcom’s locked-in AI chip partnership with Google through 2031 and the company’s growing role in custom AI compute infrastructure. Ignore the noise: Top bank says AVGO stock dip is a buying opportunity, points to locked-in Broadcom–Google AI chip deal through 2031
• Positive Sentiment: Broadcom’s new AI XPV Platform, launched with Apollo and Blackstone, is designed to support more than 20 gigawatts of AI compute capacity and extends demand visibility for its XPUs and networking products through 2028. How Broadcom’s (AVGO) AI XPV Platform Ties Its Custom XPUs to the Next Wave of AI Compute Demand
• Neutral Sentiment: Several articles said Broadcom is drawing increased investor attention after its strong AI-related revenue growth and recent earnings beat, reinforcing the view that the stock remains a key AI infrastructure name. Broadcom Inc. (AVGO) is Attracting Investor Attention: Here is What You Should Know
• Negative Sentiment: Broadcom was also hit by a broader semiconductor and tech selloff, which weighed on chip stocks across the sector and contributed to the recent decline in AVGO shares. Nvidia, AMD, Broadcom Fall as Tech Selloff Catches Up With Chips
• Negative Sentiment: Wall Street Zen reportedly lowered its rating on Broadcom, adding another near-term headwind for sentiment. Broadcom NASDAQ: AVGO Stock Rating Lowered by Wall Street Zen

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in the stock. Vanguard Group Inc. grew its position 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 valued at $167,064,997,000 after purchasing an additional 3,919,715 shares in the last quarter. State Street Corp raised its position in shares of Broadcom by 2.7% in the fourth quarter. State Street Corp now owns 190,084,351 shares of the semiconductor manufacturer's stock worth $65,788,194,000 after buying an additional 5,040,801 shares in the last quarter. Geode Capital Management LLC boosted its stake 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 buying an additional 1,548,699 shares during the period. Price T Rowe Associates Inc. MD boosted 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 valued at $29,607,500,000 after buying an additional 2,491,644 shares during the period. Finally, Norges Bank bought a new position in Broadcom in the 4th quarter worth about $24,252,196,000. Hedge funds and other institutional investors own 76.43% of the company's stock.

Broadcom Price Performance

The business has a 50 day simple moving average of $412.17 and a two-hundred day simple moving average of $363.42. The firm has a market capitalization of $1.81 trillion, a P/E ratio of 63.36, a price-to-earnings-growth ratio of 0.72 and a beta of 1.41. The company has a debt-to-equity ratio of 0.71, a quick ratio of 2.01 and a current ratio of 2.24.

Broadcom (NASDAQ:AVGO - Get Free Report) last issued its quarterly earnings results on Wednesday, June 3rd. The semiconductor manufacturer reported $2.44 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $2.40 by $0.04. The firm had revenue of $22.19 billion during the quarter, compared to the consensus estimate of $22.13 billion. Broadcom had a return on equity of 41.61% and a net margin of 38.85%.The company's revenue for the quarter was up 47.9% on a year-over-year basis. During the same quarter last year, the company posted $1.58 EPS. On average, sell-side analysts expect that Broadcom Inc. will post 10.24 EPS for the current fiscal year.

Broadcom Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Tuesday, June 30th. Shareholders of record on Monday, June 22nd will be paid a $0.65 dividend. This represents a $2.60 dividend on an annualized basis and a yield of 0.7%. The ex-dividend date of this dividend is Monday, June 22nd. Broadcom's payout ratio is currently 43.33%.

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.

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