Broadcom Inc. $AVGO Stock: First Merchants Corp Lowers Stake

Key Points

• First Merchants Corp. reduced its Broadcom stake by 3.6% in the third quarter, selling 4,776 shares and retaining 127,304 shares valued at approximately $44.7 million. Institutional investors collectively own 76.43% of AVGO.
• Analysts remain broadly positive, with 37 Buy ratings, one Strong Buy and three Holds; the stock has a consensus “Moderate Buy” rating and a $527.20 price target.
• Broadcom shares opened at $328.75, down 4.5%, amid concerns about higher financing costs and potentially weaker AI infrastructure spending, despite strong quarterly results that exceeded earnings and revenue estimates.

First Merchants Corp cut its holdings in Broadcom Inc. (NASDAQ:AVGO - Free Report) by 3.6% in the third quarter, according to the company in its most recent disclosure with the SEC. The institutional investor owned 127,304 shares of the semiconductor manufacturer's stock after selling 4,776 shares during the quarter. Broadcom accounts for approximately 1.5% of First Merchants Corp's investment portfolio, making the stock its 12th largest position. First Merchants Corp's holdings in Broadcom were worth $44,708,000 at the end of the most recent quarter.

A number of other institutional investors and hedge funds have also recently modified their holdings of AVGO. Networth Advisors LLC grew its stake 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 buying an additional 71 shares in the last quarter. Core Capital Management & Research inc. bought a new stake in shares of Broadcom in the 2nd quarter worth about $31,000. Harborfront Financial Group LLC bought a new stake in shares of Broadcom in the 2nd quarter worth about $38,000. Coppell Advisory Solutions LLC purchased a new stake in shares of Broadcom during the 2nd quarter valued at about $60,000. Finally, IMG Wealth Management Inc. purchased a new stake in shares of Broadcom during the 2nd quarter valued at about $64,000. 76.43% of the stock is owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

A number of research analysts recently commented on the stock. Bank of America lowered their price target on shares of Broadcom from $530.00 to $460.00 and set a "buy" rating for the company in a report on Thursday, September 3rd. Raymond James Financial reissued an "outperform" rating and set a $475.00 price objective (up from $450.00) on shares of Broadcom in a research note on Thursday, September 3rd. Jefferies Financial Group assumed coverage on Broadcom in a research note on Thursday, September 3rd. They set a "buy" rating and a $550.00 price objective on the stock. Wall Street Zen downgraded Broadcom from a "strong-buy" rating to a "buy" rating in a research report on Saturday, July 18th. Finally, Fox Advisors raised Broadcom to an "outperform" rating in a research note on Thursday, September 3rd. One investment analyst has rated the stock with a Strong Buy rating, thirty-seven have assigned a Buy rating and three have assigned a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $527.20.

Key Broadcom News

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom’s long-term AI opportunity remains attractive because hyperscalers and companies including OpenAI, Anthropic, Alphabet and Meta are adopting custom-designed chips and high-speed networking as alternatives to Nvidia GPUs. Analysts and investors continue to view Broadcom’s combination of custom silicon, networking and infrastructure software as a potential long-term growth engine. Will Broadcom Rejoin the $2 Trillion Club in 2027?
• Positive Sentiment: Erste Group raised its FY2027 earnings forecast for Broadcom, while roughly $121.5 million of net ETF purchases on Oct. 14 indicate that some institutional investors continue to add exposure. Broadcom FY2027 Earnings Forecast Raised by Erste Group Bank
• Neutral Sentiment: Broadcom’s reported plan to arrange $60 billion in financing connected to Anthropic could expand its AI relationship and customer opportunity, but it also increases the financial stakes and execution risk of the company’s AI strategy. Broadcom’s Anthropic Bet Gets Bigger
• Neutral Sentiment: Broadcom and CoreWeave rejected tokenized shares offered through the OKX/ICE venue, limiting a potential new trading channel but signaling caution around digital representations of public-company stock. CoreWeave, Broadcom Reject Tokenized Shares
• Negative Sentiment: CEO Hock Tan warned that rising financing costs and speculative, “casino-like” AI investing could slow expansion. His comments raise concerns that AI customers may reduce capital spending or struggle to turn heavy infrastructure investments into profits, weighing particularly on custom-AI-chip suppliers. Broadcom Falls as AI Capital Warning Weighs
• Negative Sentiment: Higher-than-expected inflation and expectations for higher interest rates are prompting investors to rotate away from expensive technology and AI stocks. A Gartner warning that many neocloud companies could fail or consolidate by 2030 has intensified fears of an AI infrastructure spending mismatch. MarketBeat Week in Review
• Negative Sentiment: Reports that Apple may cut iPhone 18 Pro component orders create an additional demand concern for suppliers, although Broadcom’s exposure and potential impact appear less direct than for some peers. Apple Cut iPhone 18 Orders

Broadcom Trading Down 4.5%

Shares of AVGO opened at $328.75 on Friday. The company's fifty day simple moving average is $364.33 and its 200-day simple moving average is $383.51. The company has a market cap of $1.57 trillion, a P/E ratio of 41.99 and a beta of 1.46. The company has a current ratio of 2.50, a quick ratio of 2.29 and a debt-to-equity ratio of 0.57. Broadcom Inc. has a twelve month low of $289.96 and a twelve month high of $495.00.

Broadcom (NASDAQ:AVGO - Get Free Report) last released its quarterly earnings results on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 EPS for the quarter, topping analysts' consensus estimates of $3.22 by $0.10. The firm had revenue of $29.59 billion during the quarter, compared to analysts' expectations of $29.24 billion. Broadcom had a net margin of 42.94% and a return on equity of 48.33%. The firm's revenue for the quarter was up 85.5% compared to the same quarter last year. During the same period in the previous year, the company earned $1.69 EPS. As a group, analysts expect that Broadcom Inc. will post 10.37 EPS for the current year.

Broadcom Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Wednesday, September 30th. Shareholders of record on Monday, September 21st were paid a $0.65 dividend. The ex-dividend date of this dividend was Monday, September 21st. This represents a $2.60 annualized dividend and a yield of 0.8%. Broadcom's dividend payout ratio (DPR) is presently 33.21%.

Broadcom Profile

Broadcom Inc NASDAQ: AVGO is a global technology company that designs, develops, and supplies semiconductor and infrastructure software products. Its semiconductor solutions support wired and wireless communications, data center networking, broadband access, storage, industrial applications, and other markets.

The company's semiconductor portfolio includes networking and switching products, custom application-specific integrated circuits, wireless connectivity components, radio-frequency devices, optical components, and storage-related solutions.

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