Covington Investment Advisors Inc. Invests $42.14 Million in Broadcom Inc. $AVGO

Key Points

• Covington Investment Advisors bought 111,562 Broadcom shares worth approximately $42.14 million, making AVGO its fourth-largest portfolio holding at 5.4%. Institutional investors and hedge funds collectively own 76.43% of the stock.
• Broadcom reported fiscal third-quarter revenue of $29.6 billion and non-GAAP EPS of $3.32, exceeding expectations, with AI semiconductor revenue surging 221% to $16.7 billion. Management raised its AI revenue outlook to $115 billion for fiscal 2027 and $230 billion for fiscal 2028.
• Despite strong results and a consensus “Moderate Buy” rating with a $501.77 price target, fourth-quarter revenue guidance of approximately $34.8 billion fell slightly below estimates. Investors also remain focused on supply constraints, customer concentration, custom-chip competition and insider selling.

Covington Investment Advisors Inc. purchased a new stake in Broadcom Inc. (NASDAQ:AVGO - Free Report) in the second quarter, according to its most recent disclosure with the Securities and Exchange Commission. The institutional investor purchased 111,562 shares of the semiconductor manufacturer's stock, valued at approximately $42,143,000. Broadcom comprises 5.4% of Covington Investment Advisors Inc.'s portfolio, making the stock its 4th biggest position.

Other hedge funds have also modified their holdings of the company. State Street Corp increased its stake in Broadcom by 2.7% in the fourth 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 in the last quarter. Geode Capital Management LLC boosted its position in shares of Broadcom by 1.4% during the fourth quarter. Geode Capital Management LLC now owns 111,277,280 shares of the semiconductor manufacturer's stock worth $38,396,634,000 after purchasing an additional 1,548,699 shares in the last quarter. Price T Rowe Associates Inc. MD boosted its position in shares of 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 worth $29,607,500,000 after purchasing an additional 2,491,644 shares in the last quarter. Norges Bank acquired a new position in shares of Broadcom in the 4th quarter valued at $24,252,196,000. Finally, Bank of America Corp DE increased its position in shares of Broadcom by 1.5% in the 1st quarter. Bank of America Corp DE now owns 58,737,097 shares of the semiconductor manufacturer's stock valued at $18,179,719,000 after buying an additional 894,564 shares in the last quarter. 76.43% of the stock is currently owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

AVGO has been the topic of several research analyst reports. TD Cowen reaffirmed a "buy" rating and set a $475.00 price objective (down from $500.00) on shares of Broadcom in a research note on Thursday. Erste Group Bank restated a "hold" rating on shares of Broadcom in a report on Tuesday, July 7th. Morgan Stanley reaffirmed an "overweight" rating and set a $505.00 price target (up from $502.00) on shares of Broadcom in a research report on Thursday. Truist Financial cut their price objective on Broadcom from $550.00 to $520.00 and set a "buy" rating on the stock in a report on Thursday. Finally, Raymond James Financial reiterated an "outperform" rating and issued a $475.00 price objective (up from $450.00) on shares of Broadcom in a research report on Thursday. Thirty-one research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the stock. According to data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $501.77.

Key Stories Impacting Broadcom

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom reported fiscal third-quarter revenue of $29.6 billion, up 86% year over year, and non-GAAP EPS of $3.32, exceeding estimates of $29.43 billion and $3.22. AI semiconductor revenue surged 221% to $16.7 billion, while free cash flow reached $13.7 billion. Broadcom fiscal third-quarter results
• Positive Sentiment: Management raised its fiscal 2027 AI revenue outlook to $115 billion and projected $230 billion in fiscal 2028, alongside confidence in fiscal 2027 EPS of at least $30. Analysts including Macquarie, Cantor Fitzgerald, BMO and Rosenblatt responded with upgrades or higher price targets, supporting the long-term AI investment case. Broadcom AI growth outlook
• Neutral Sentiment: Broadcom declared a quarterly dividend of $0.65 per share, payable September 30 to shareholders of record September 21. The dividend provides modest income but is unlikely to drive the stock’s near-term performance. Broadcom dividend announcement
• Negative Sentiment: Fiscal fourth-quarter revenue guidance of approximately $34.8 billion was below Wall Street’s roughly $35.0 billion expectation. Investors viewed the outlook as insufficient given AVGO’s premium valuation and elevated AI expectations, overshadowing the earnings beat. Broadcom forecasts quarterly revenue below estimates
• Negative Sentiment: Investors are also weighing supply constraints involving power, land, chips and substrates, along with customer concentration among major hyperscalers such as Alphabet, Anthropic and OpenAI. Competition from custom-chip rivals, including Marvell, adds uncertainty to the ambitious long-term forecast. Broadcom AI supply constraints
• Negative Sentiment: Recent disclosures that Third Point exited its Broadcom position and that company insiders have overwhelmingly sold shares may reinforce profit-taking concerns, although these transactions are not necessarily indicative of deteriorating fundamentals. Dan Loeb exits Broadcom position

Broadcom Stock Performance

AVGO opened at $357.16 on Friday. The company has a market capitalization of $1.70 trillion, a price-to-earnings ratio of 45.61, a P/E/G ratio of 0.70 and a beta of 1.44. The business's 50-day moving average price is $383.71 and its two-hundred day moving average price is $377.36. Broadcom Inc. has a 1 year low of $289.96 and a 1 year high of $495.00. The company has a debt-to-equity ratio of 0.71, a current ratio of 2.24 and a quick ratio of 2.01.

Broadcom (NASDAQ:AVGO - Get Free Report) last posted its quarterly earnings data on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 earnings per share for the quarter, topping the consensus estimate of $3.22 by $0.10. The company had revenue of $29.59 billion during the quarter, compared to analysts' expectations of $29.24 billion. Broadcom had a return on equity of 50.76% and a net margin of 42.94%.Broadcom's revenue for the quarter was up 85.5% compared to the same quarter last year. During the same period in the prior year, the firm earned $1.69 earnings per share. Equities analysts expect that Broadcom Inc. will post 10.24 EPS for the current fiscal year.

Broadcom Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Wednesday, September 30th. Shareholders of record on Monday, September 21st will be given a dividend of $0.65 per share. The ex-dividend date of this dividend is Monday, September 21st. This represents a $2.60 dividend on an annualized basis and a yield of 0.7%. Broadcom's dividend payout ratio is 43.33%.

Insider Transactions at Broadcom

In other news, Director Gayla J. Delly sold 1,890 shares of the business's stock in a transaction on Wednesday, July 8th. The shares were sold at an average price of $385.38, for a total value of $728,368.20. Following the sale, the director owned 31,326 shares of the company's stock, valued at $12,072,413.88. The trade was a 5.69% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, insider Mark Brazeal sold 25,000 shares of the stock in a transaction 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 transaction, the insider owned 194,989 shares of the company's stock, valued at $78,254,935.37. The trade was a 11.36% decrease in their position. The SEC filing for this sale provides additional information. In the last 90 days, insiders sold 61,644 shares of company stock worth $24,016,214. Insiders own 1.90% 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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