Broadcom (NASDAQ:AVGO) Trading Down 2.6% - Time to Sell?

Key Points

• Broadcom shares fell 2.6% to about $358.76 amid broad semiconductor weakness, elevated valuation concerns and worries that Marvell’s expanded Google custom-chip deal could reduce Broadcom’s AI-chip market share.
• Despite the near-term pressure, Broadcom reported strong results: quarterly revenue rose 47.9% year over year to $22.19 billion, while earnings of $2.44 per share exceeded analyst expectations. Its AI exposure and hyperscaler relationships remain major investment attractions.
• Wall Street remains broadly bullish, with 29 Buy ratings and four Holds and a consensus price target of $491.97, although investors are also monitoring potential AI-related financing leverage, the difficulty of reaching a $100 billion AI-revenue target and recent insider selling.

Shares of Broadcom Inc. (NASDAQ:AVGO - Get Free Report) were down 2.6% on Monday . The stock traded as low as $358.71 and last traded at $358.76. 18,230,826 shares changed hands during trading, a decline of 27% from the average daily volume of 25,066,105 shares. The stock had previously closed at $368.45.

Broadcom News Roundup

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom’s strong AI exposure remains a key investment attraction. Recent analysis highlights its leading hyperscaler relationships and custom AI-chip business, while its latest quarterly results showed revenue growth of nearly 48% year over year and earnings above analyst expectations. The Big Difference Between Broadcom and Marvell Technology
• Positive Sentiment: Historical precedent offers some reassurance: although Apple previously reduced its use of a key Broadcom chip, Broadcom’s revenue nearly doubled over the following two fiscal years. This suggests customer changes do not necessarily derail the company’s longer-term growth. Broadcom Has Seen Its Biggest Customer Drop a Key Chip Before
• Neutral Sentiment: Broadcom and Marvell are competing for custom AI-chip demand from hyperscalers. Investors are focused on which company can deliver better performance at a lower cost, making upcoming AI guidance particularly important. Broadcom vs. Marvell Technology
• Negative Sentiment: Marvell’s expanded custom-chip agreement with Google has intensified fears that Broadcom could lose share in a strategically important market. The development contributed to a decline of more than 10% in Broadcom shares from recent levels and increased scrutiny of its forthcoming AI outlook. Marvell Takes a Shot at Broadcom’s Throne With Google Deal
• Negative Sentiment: Investors are questioning a reported $60 billion financing structure for future AI-chip deployments, particularly the potential leverage and the larger financial commitments required to support projected AI revenue. Analysts also argue that a $100 billion AI-revenue target may be difficult to achieve. Broadcom’s $60 Billion AI Debt Deal
• Negative Sentiment: Broad semiconductor-sector weakness ahead of NVIDIA’s results has encouraged investors to reduce risk in high-valued chip stocks. Broadcom’s elevated valuation and the decision by Third Point to exit its position add to concerns about near-term sentiment. Semiconductor Stocks Slide Ahead of NVIDIA Earnings

Wall Street Analysts Forecast Growth

A number of equities research analysts recently issued reports on the company. Oppenheimer restated an "outperform" rating and issued a $535.00 price objective (up from $450.00) on shares of Broadcom in a research note on Thursday, June 4th. Rosenblatt Securities reiterated a "buy" rating and issued a $500.00 target price on shares of Broadcom in a research note on Thursday, June 4th. Zacks Research lowered shares of Broadcom from a "strong-buy" rating to a "hold" rating in a research report on Thursday, May 21st. Deutsche Bank Aktiengesellschaft restated a "buy" rating and set a $515.00 price target (up from $430.00) on shares of Broadcom in a research note on Thursday, June 4th. Finally, KeyCorp reaffirmed an "overweight" rating and issued a $575.00 price objective (up from $500.00) on shares of Broadcom in a report on Thursday, June 4th. Twenty-nine equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company's stock. According to data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and a consensus target price of $491.97.

Broadcom Trading Down 2.6%

The company has a debt-to-equity ratio of 0.71, a quick ratio of 2.01 and a current ratio of 2.24. The firm has a market cap of $1.71 trillion, a P/E ratio of 59.79, a P/E/G ratio of 0.70 and a beta of 1.45. The firm has a 50 day simple moving average of $388.57 and a 200 day simple moving average of $375.10.

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

Broadcom Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Tuesday, June 30th. Investors of record on Monday, June 22nd were given a $0.65 dividend. This represents a $2.60 dividend on an annualized basis and a dividend yield of 0.7%. The ex-dividend date was Monday, June 22nd. Broadcom's dividend payout ratio (DPR) is 43.33%.

Insiders Place Their Bets

In other news, Director Justine Page sold 1,602 shares of Broadcom stock in a transaction dated Monday, June 29th. The stock was sold at an average price of $373.86, for a total transaction of $598,923.72. Following the completion of the sale, the director owned 17,426 shares in the company, valued at approximately $6,514,884.36. This trade represents a 8.42% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, insider Mark David Brazeal sold 25,000 shares of the business's stock in a transaction that occurred on Friday, July 10th. The stock was sold at an average price of $401.33, for a total transaction of $10,033,250.00. Following the completion of the transaction, the insider directly owned 194,989 shares of the company's stock, valued at approximately $78,254,935.37. This represents a 11.36% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders sold 61,644 shares of company stock worth $24,016,214. 1.90% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Broadcom

Institutional investors have recently made changes to their positions in the business. Brighton Jones LLC grew its holdings in Broadcom by 21.8% in the 4th quarter. Brighton Jones LLC now owns 29,683 shares of the semiconductor manufacturer's stock worth $6,882,000 after acquiring an additional 5,322 shares during the last quarter. Revolve Wealth Partners LLC lifted its holdings in shares of Broadcom by 10.4% during the fourth quarter. Revolve Wealth Partners LLC now owns 7,997 shares of the semiconductor manufacturer's stock valued at $1,854,000 after purchasing an additional 756 shares during the last quarter. United Bank raised its stake in Broadcom by 76.5% during the first quarter. United Bank now owns 2,339 shares of the semiconductor manufacturer's stock valued at $392,000 after buying an additional 1,014 shares during the last quarter. Sivia Capital Partners LLC boosted its stake in Broadcom by 10.1% in the 2nd quarter. Sivia Capital Partners LLC now owns 12,693 shares of the semiconductor manufacturer's stock worth $3,499,000 after purchasing an additional 1,160 shares in the last quarter. Finally, Capital & Planning LLC grew its holdings in shares of Broadcom by 10.5% during the second quarter. Capital & Planning LLC now owns 3,983 shares of the semiconductor manufacturer's stock valued at $1,098,000 after buying an additional 378 shares during the last quarter. Hedge funds and other institutional investors own 76.43% of the company's stock.

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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