Broadcom (NASDAQ:AVGO) Trading Down 4.4% - Here's What Happened

Key Points

• Broadcom shares fell 4.4% on Tuesday to about $376.71, even as trading volume came in above average. The drop followed a recent run-up and reflects continued volatility in the stock.
• Despite the selloff, analysts remain broadly bullish, with several firms raising price targets and one recent upgrade to Buy/Strong-Buy. The consensus rating remains Moderate Buy with an average target near $490.13.
• Fundamentals and AI demand remain supportive: Broadcom beat quarterly EPS and revenue estimates, posted 47.9% year-over-year revenue growth, and is still viewed as a key beneficiary of the AI infrastructure buildout. However, sentiment has been pressured by cautious AI guidance and valuation concerns.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report)'s stock price was down 4.4% on Tuesday . The stock traded as low as $376.46 and last traded at $376.71. Approximately 29,291,262 shares were traded during trading, an increase of 13% from the average daily volume of 25,998,006 shares. The stock had previously closed at $393.94.

Key Stories Impacting Broadcom

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Director Harry L. You bought 1,000 shares of Broadcom, which investors often view as a confidence signal from management. SEC Form 4 filing
• Positive Sentiment: Broadcom continues to be highlighted as a key beneficiary of the AI infrastructure buildout, with commentary pointing to its custom compute, networking, and semiconductor exposure. Investopedia article
• Positive Sentiment: Analyst tone remains supportive, including a reported upgrade to Strong-Buy from Wall Street Zen, which can help reinforce bullish sentiment. American Banking News article
• Neutral Sentiment: Some recent comparisons say other AI infrastructure names may offer stronger near-term upside, but Broadcom still ranks highly due to its scale and profitability. Zacks article
• Negative Sentiment: Recent market coverage said Broadcom’s shares fell after record quarterly results because investors focused on cautious AI guidance and valuation concerns, which appears to be the main drag on sentiment. Yahoo Finance article

Analysts Set New Price Targets

Several equities analysts have recently weighed in on AVGO shares. Oppenheimer reiterated an "outperform" rating and set a $535.00 price objective (up from $450.00) on shares of Broadcom in a report on Thursday, June 4th. Erste Group Bank upgraded Broadcom from a "hold" rating to a "buy" rating in a report on Friday, June 5th. Deutsche Bank Aktiengesellschaft reiterated a "buy" rating and set a $515.00 price objective (up from $430.00) on shares of Broadcom in a report on Thursday, June 4th. TD Cowen reiterated a "buy" rating and set a $500.00 price objective on shares of Broadcom in a report on Thursday, June 4th. Finally, Evercore reiterated an "outperform" rating and set a $582.00 price objective on shares of Broadcom in a report on Tuesday, May 19th. One research analyst has rated the stock with a Strong Buy rating, twenty-nine have issued a Buy rating and three have given a Hold rating to the company's stock. According to MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus price target of $490.13.

Broadcom Price Performance

The stock has a market cap of $1.79 trillion, a P/E ratio of 62.80, a PEG ratio of 0.67 and a beta of 1.41. The company has a 50 day simple moving average of $405.85 and a 200 day simple moving average of $363.29. The company has a current ratio of 2.24, a quick ratio of 2.01 and a debt-to-equity ratio of 0.71.

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

Broadcom Announces Dividend

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

Insider Activity at Broadcom

In other news, Director Justine Page sold 2,018 shares of the company's stock in a transaction that occurred on Wednesday, April 8th. The stock was sold at an average price of $353.00, for a total transaction of $712,354.00. Following the sale, the director owned 18,164 shares in the company, valued at $6,411,892. This represents a 10.00% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this link. Also, insider Charlie B. Kawwas sold 10,000 shares of the company's stock in a transaction that occurred on 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 sale, the insider owned 787,184 shares in the company, valued at approximately $271,759,532.32. This represents a 1.25% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 51,233 shares of company stock worth $18,125,134. Insiders own 1.90% of the company's stock.

Institutional Investors Weigh In On Broadcom

Institutional investors and hedge funds have recently made changes to their positions in the stock. Carmignac Gestion increased its holdings in shares of Broadcom by 271.6% during the 1st quarter. Carmignac Gestion now owns 541,651 shares of the semiconductor manufacturer's stock worth $167,447,000 after acquiring an additional 395,871 shares during the last quarter. Militia Capital Management LLC acquired a new position in shares of Broadcom during the 1st quarter worth approximately $557,000. Shariaportfolio Inc. acquired a new position in shares of Broadcom during the 1st quarter worth approximately $2,068,000. E Wealth Partners LLC increased its holdings in shares of Broadcom by 16.9% during the 1st quarter. E Wealth Partners LLC now owns 940 shares of the semiconductor manufacturer's stock worth $291,000 after acquiring an additional 136 shares during the last quarter. Finally, Rathbones Group PLC increased its holdings in shares of Broadcom by 17.2% during the 1st quarter. Rathbones Group PLC now owns 1,132,778 shares of the semiconductor manufacturer's stock worth $350,606,000 after acquiring an additional 166,387 shares during the last quarter. 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.

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