Broadcom (NASDAQ:AVGO) Shares Down 3.3% - Here's What Happened

Key Points

• Broadcom shares fell 3.3% on Friday, trading as low as $419.80 after closing at $439.79, even as volume came in below average at 18.5 million shares.
• Despite the pullback, analysts remain bullish on Broadcom’s AI growth story, with Wells Fargo and Truist both raising price targets to $545 and citing stronger-than-expected AI semiconductor demand.
• The stock is getting support from strong fundamentals and institutional buying: Broadcom beat quarterly EPS and revenue estimates, posted 29.5% year-over-year revenue growth, and continues to have heavy ownership from large funds, though some commentary warns AI stocks may be overheating.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report) traded down 3.3% during trading on Friday . The company traded as low as $419.80 and last traded at $425.19. 18,504,800 shares changed hands during trading, a decline of 25% from the average session volume of 24,719,965 shares. The stock had previously closed at $439.79.

Key Headlines Impacting Broadcom

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Wall Street remains constructive on Broadcom’s AI growth story, with analysts citing stronger-than-expected AI semiconductor demand and raising price targets as investors look ahead to the next earnings report. Wells Fargo Just Hiked Broadcom Price Target to $545: AI Semi Revenue Running 30-40% Higher Than Expected
• Positive Sentiment: Broadcom is being highlighted as a winner in the “second wave” of AI, with investors shifting toward inference, networking, and other infrastructure bottlenecks that could support longer-term revenue growth. The AI Boom’s Best-Kept Secret
• Positive Sentiment: A Zacks stock note singled out AVGO as a top tech name to own as the broader market benefits from AI optimism and a tech-led rebound. 4 Tech Stocks to Buy as S&P 500 Closes Above 7,500 Milestone
• Neutral Sentiment: Broadcom also continues to attract institutional interest, including reported stake increases from some fund managers, which reinforces demand for the shares but does not add new fundamental information. Bowie Capital Management Boosts Broadcom Stake by 2,422 Shares
• Negative Sentiment: Some market commentary warns that AI stocks are becoming crowded and overheated, with Broadcom included among the large-cap semiconductor names seen as highly crowded longs, raising the risk of a near-term pullback. UBS warns AI stocks are overheating as growth expectations collide with history
• Negative Sentiment: Broader AI-chip sentiment may also be vulnerable to a short-term correction after a sharp sector run, which could pressure AVGO even if its long-term outlook remains strong. The AI Chip Rally Is Masking a Dangerous Truth Half the S&P 500 Is Being Left Behind

Analyst Upgrades and Downgrades

A number of research analysts have recently commented on the company. Wells Fargo & Company reaffirmed an "overweight" rating and set a $545.00 price target (up from $430.00) on shares of Broadcom in a research report on Thursday. Truist Financial upped their price target on Broadcom from $510.00 to $545.00 and gave the company a "buy" rating in a research report on Thursday, March 5th. Erste Group Bank cut Broadcom from a "buy" rating to a "hold" rating in a research report on Thursday, April 2nd. Morgan Stanley upped their price target on Broadcom from $462.00 to $470.00 and gave the company an "overweight" rating in a research report on Friday, March 6th. Finally, Seaport Research Partners reaffirmed a "neutral" rating on shares of Broadcom in a research report on Wednesday, April 8th. Two analysts have rated the stock with a Strong Buy rating, twenty-seven have given a Buy rating and four have assigned a Hold rating to the company's stock. According to MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $441.63.

Broadcom Price Performance

The business has a fifty day moving average of $363.46 and a 200-day moving average of $354.12. The firm has a market cap of $2.01 trillion, a PE ratio of 83.05, a PEG ratio of 0.86 and a beta of 1.43. 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 (NASDAQ:AVGO - Get Free Report) last issued its quarterly earnings data on Wednesday, March 4th. The semiconductor manufacturer reported $2.05 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $2.03 by $0.02. The business had revenue of $19.31 billion for the quarter, compared to analysts' expectations of $19.10 billion. Broadcom had a return on equity of 38.61% and a net margin of 36.57%.The firm's quarterly revenue was up 29.5% on a year-over-year basis. During the same quarter in the prior year, the firm posted $1.60 EPS. As a group, research analysts predict that Broadcom Inc. will post 9.95 earnings per share for the current year.

Broadcom Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Tuesday, March 31st. Investors of record on Monday, March 23rd were issued a dividend of $0.65 per share. The ex-dividend date of this dividend was Monday, March 23rd. This represents a $2.60 dividend on an annualized basis and a yield of 0.6%. Broadcom's dividend payout ratio is 50.78%.

Insider Buying and Selling at Broadcom

In other Broadcom news, insider Mark David Brazeal sold 50,488 shares of the company's stock in a transaction dated Tuesday, March 17th. The stock was sold at an average price of $321.60, for a total value 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 represents a 15.36% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider Charlie B. Kawwas sold 10,000 shares of the company's stock in a transaction dated Wednesday, April 8th. The stock was sold at an average price of $345.23, for a total value of $3,452,300.00. Following the completion of the transaction, the insider owned 787,184 shares in the company, valued at $271,759,532.32. This represents a 1.25% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 324,282 shares of company stock worth $106,425,249 in the last three months. 1.90% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Broadcom

A number of institutional investors have recently added to or reduced their stakes in AVGO. Norges Bank bought a new position in Broadcom in the 4th quarter worth about $24,252,196,000. Cardano Risk Management B.V. increased its stake in Broadcom by 895.2% in the 4th quarter. Cardano Risk Management B.V. now owns 12,689,800 shares of the semiconductor manufacturer's stock worth $4,391,940,000 after acquiring an additional 11,414,701 shares during the last quarter. Arrowstreet Capital Limited Partnership increased its position in shares of Broadcom by 118.1% during the 1st quarter. Arrowstreet Capital Limited Partnership now owns 18,739,006 shares of the semiconductor manufacturer's stock valued at $5,799,889,000 after purchasing an additional 10,145,377 shares during the last quarter. State Street Corp increased its position in shares of Broadcom by 2.7% during the 4th quarter. State Street Corp now owns 190,084,351 shares of the semiconductor manufacturer's stock valued at $65,788,194,000 after purchasing an additional 5,040,801 shares during the last quarter. Finally, Vanguard Group Inc. increased 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 during the last quarter. 76.43% of the stock is currently owned by institutional investors.

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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