Primecap Management Co. CA Takes Position in Broadcom Inc. $AVGO

Key Points

• Primecap Management initiated a sizable Broadcom position, purchasing 736,773 shares worth approximately $278.3 million in the second quarter. Institutional investors now own 76.43% of Broadcom’s stock.
• Analysts remain broadly bullish: 31 analysts rate Broadcom a Buy and four rate it Hold, producing a Moderate Buy consensus and an average price target of $500.60.
• Broadcom beat quarterly expectations with $3.32 in earnings per share and $29.59 billion in revenue, up 85.5% year over year, while declaring a $0.65 quarterly dividend. However, the company’s slightly below-consensus revenue outlook and concerns about margins, customer concentration, and AI infrastructure constraints remain risks.

Primecap Management Co. CA purchased a new stake in Broadcom Inc. (NASDAQ:AVGO - Free Report) in the 2nd quarter, according to its most recent filing with the Securities & Exchange Commission. The fund purchased 736,773 shares of the semiconductor manufacturer's stock, valued at approximately $278,316,000.

A number of other hedge funds have also recently added to or reduced their stakes in the stock. ROSS JOHNSON & Associates LLC lifted its position in shares of Broadcom by 1,320.0% during the 4th quarter. ROSS JOHNSON & Associates LLC now owns 71 shares of the semiconductor manufacturer's stock valued at $25,000 after acquiring an additional 66 shares during the period. Networth Advisors LLC increased its position in shares of Broadcom by 546.2% in the first quarter. Networth Advisors LLC now owns 84 shares of the semiconductor manufacturer's stock worth $26,000 after purchasing an additional 71 shares during the period. SWAN Capital LLC raised its stake in Broadcom by 261.9% in the fourth quarter. SWAN Capital LLC now owns 76 shares of the semiconductor manufacturer's stock valued at $26,000 after purchasing an additional 55 shares in the last quarter. Harborfront Financial Group LLC bought a new stake in Broadcom during the second quarter worth about $38,000. Finally, Cherry Tree Wealth Management LLC lifted its position in Broadcom by 44.9% during the fourth quarter. Cherry Tree Wealth Management LLC now owns 129 shares of the semiconductor manufacturer's stock worth $45,000 after purchasing an additional 40 shares during the period. Institutional investors own 76.43% of the company's stock.

Analysts Set New Price Targets

Several equities research analysts have weighed in on the company. Lake Street Capital upgraded Broadcom to a "buy" rating in a research note on Thursday. Raymond James Financial reissued an "outperform" rating and set a $475.00 price target (up from $450.00) on shares of Broadcom in a report on Thursday. The Goldman Sachs Group restated a "buy" rating on shares of Broadcom in a research report on Monday, August 3rd. Oppenheimer reaffirmed 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. Finally, BMO Capital Markets lifted their target price on Broadcom from $455.00 to $575.00 and gave the company an "outperform" rating in a research report on Thursday. Thirty-one investment analysts have rated the stock with a Buy rating and four have given a Hold rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $500.60.

Broadcom Trading Up 0.2%

Shares of AVGO stock opened at $357.89 on Friday. The firm has a market capitalization of $1.70 trillion, a P/E ratio of 45.71, a P/E/G ratio of 0.68 and a beta of 1.44. Broadcom Inc. has a twelve month low of $289.96 and a twelve month high of $495.00. The company has a quick ratio of 2.01, a current ratio of 2.50 and a debt-to-equity ratio of 0.57. The stock's fifty day simple moving average is $383.57 and its 200 day simple moving average is $377.23.

Broadcom (NASDAQ:AVGO - Get Free Report) last posted its earnings results on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 EPS for the quarter, beating the consensus estimate of $3.22 by $0.10. Broadcom had a return on equity of 48.33% and a net margin of 42.94%.The firm had revenue of $29.59 billion during the quarter, compared to the consensus estimate of $29.24 billion. During the same period last year, the company earned $1.69 earnings per share. The business's quarterly revenue was up 85.5% on a year-over-year basis. As a group, sell-side analysts predict that Broadcom Inc. will post 10.25 EPS for the current fiscal year.

Broadcom Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 30th. Stockholders of record on Monday, September 21st will be paid a $0.65 dividend. The ex-dividend date of this dividend is Monday, September 21st. This represents a $2.60 annualized dividend and a dividend yield of 0.7%. Broadcom's dividend payout ratio is currently 33.21%.

Insider Buying and Selling at Broadcom

In related news, Director Justine Page sold 1,602 shares of the firm's stock in a transaction that occurred on Monday, June 29th. The shares were sold at an average price of $373.86, for a total value of $598,923.72. Following the completion of the transaction, the director owned 17,426 shares in the company, valued at $6,514,884.36. This trade represents a 8.42% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, Director Harry L. You bought 1,000 shares of Broadcom stock in a transaction on Thursday, June 11th. The shares were acquired at an average cost of $373.57 per share, for a total transaction of $373,570.00. Following the completion of the acquisition, the director directly owned 38,466 shares in the company, valued at approximately $14,369,743.62. The trade was a 2.67% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Insiders have sold 61,644 shares of company stock worth $24,016,214 in the last 90 days. Corporate insiders own 1.90% of the company's stock.

Broadcom News Roundup

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Investor interest in Broadcom’s AI opportunity remains strong. AI semiconductor revenue surged 221% year over year to $16.7 billion, while management raised its AI revenue outlook to approximately $115 billion for fiscal 2027 and $230 billion for fiscal 2028. Several analysts and commentators view the selloff as a buying opportunity. The Path to $230 Billion: Broadcom Outlines the Next Phase of Its AI Growth Story
• Positive Sentiment: Analysts continue to see substantial upside despite some target reductions. Truist maintained a buy rating with a $520 target, while other firms cited targets ranging from $575 to $600. Macquarie upgraded Broadcom to Outperform, citing strong custom-chip growth and reduced concerns about customers developing chips internally. These Analysts Increase Their Forecasts On Broadcom Following Upbeat Q3 Earnings
• Positive Sentiment: Unusual options activity provided another bullish trading signal: investors purchased roughly 373,000 call options, about 26% above average call volume. Broadcom also declared a quarterly dividend of $0.65 per share, payable September 30 to eligible shareholders.
• Neutral Sentiment: Broadcom beat quarterly expectations with adjusted earnings of $3.32 per share versus a $3.22 consensus and revenue of $29.59 billion. The company’s long-term AI demand commentary was strong, but investors are focused on whether supply, power, land and data-center construction constraints can limit near-term shipments. Broadcom CEO Says AI Demand Could Be Significantly Higher
• Negative Sentiment: The main pressure remains Broadcom’s fourth-quarter revenue outlook of $34.8 billion, slightly below Wall Street’s roughly $35.0 billion expectation. The modest guidance miss, concerns about margin compression and customer concentration—including major AI customers—caused the initial sell-the-news reaction despite excellent AI growth.
• Negative Sentiment: Third Point disclosed that it exited its remaining Broadcom position during the second quarter. Although the holding was relatively small, the sale adds to caution around elevated valuation and expectations for the AI-chip cycle.

Broadcom 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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