Traders Purchase High Volume of Call Options on Broadcom (NASDAQ:AVGO)

Key Points

• Broadcom call-option activity surged: Investors bought 373,266 call options, about 26% above the average volume. The stock rose 0.2% to $357.90 during Friday trading.
• Strong earnings and AI demand supported the company: Quarterly revenue increased 85.5% year over year to $29.59 billion, while EPS beat estimates. AI semiconductor revenue reportedly surged 221%, driving higher long-term growth expectations.
• Analysts remain bullish, but near-term concerns persist: Thirty-one analysts rate Broadcom a Buy, with an average price target of $500.60, although fourth-quarter revenue guidance slightly missed expectations and supply constraints may limit near-term growth.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report) saw unusually large options trading on Friday. Investors bought 373,266 call options on the stock. This represents an increase of approximately 26% compared to the average volume of 297,336 call options.

Broadcom Trading Up 0.2%

Shares of NASDAQ:AVGO traded up $0.74 during midday trading on Friday, hitting $357.90. The company had a trading volume of 32,317,609 shares, compared to its average volume of 25,200,689. 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 has a 12 month low of $289.96 and a 12 month high of $495.00. The firm has a fifty day simple moving average of $383.71 and a 200 day simple moving average of $377.36. The stock has a market cap of $1.70 trillion, a price-to-earnings ratio of 45.71, a PEG ratio of 0.70 and a beta of 1.44.

Broadcom (NASDAQ:AVGO - Get Free Report) last announced its quarterly earnings results on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 EPS for the quarter, beating analysts' consensus estimates of $3.22 by $0.10. Broadcom had a return on equity of 50.76% and a net margin of 42.94%.The company had revenue of $29.59 billion during the quarter, compared to analysts' expectations of $29.24 billion. During the same period in the prior year, the business posted $1.69 EPS. Broadcom's revenue was up 85.5% on a year-over-year basis. On average, analysts predict that Broadcom will post 10.24 EPS for the current year.

Broadcom Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Wednesday, September 30th. Stockholders of record on Monday, September 21st will be issued 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 payout ratio is 43.33%.

Insiders Place Their Bets

In related news, Director Justine Page sold 1,602 shares of the company's stock in a transaction dated Monday, June 29th. The shares were sold at an average price of $373.86, for a total transaction of $598,923.72. Following the transaction, the director owned 17,426 shares in the company, valued at $6,514,884.36. This represents a 8.42% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Harry L. You acquired 1,000 shares of the firm's stock in a transaction on Thursday, June 11th. The shares were bought at an average cost of $373.57 per share, for a total transaction of $373,570.00. Following the acquisition, the director 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. Over the last ninety days, insiders sold 61,644 shares of company stock valued at $24,016,214. 1.90% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

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

Wall Street Analysts Forecast Growth

AVGO has been the subject of several research reports. Fox Advisors raised Broadcom to an "outperform" rating in a research note on Thursday. Mizuho raised their price target on Broadcom from $480.00 to $530.00 and gave the company an "outperform" rating in a report on Thursday, June 4th. Dbs Bank upgraded Broadcom to a "moderate buy" rating in a research report on Thursday, June 18th. Morgan Stanley reissued an "overweight" rating and set a $505.00 price objective (up from $502.00) on shares of Broadcom in a report on Thursday. Finally, Oppenheimer restated an "outperform" rating and set a $535.00 target price (up from $450.00) on shares of Broadcom in a research report on Thursday, June 4th. Thirty-one analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company's stock. Based on data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average target price of $500.60.

Broadcom News Roundup

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: AI growth remains exceptionally strong: Fiscal third-quarter revenue rose 86% year over year to $29.6 billion, while non-GAAP EPS of $3.32 exceeded the $3.22 consensus estimate. AI semiconductor revenue surged 221% to $16.7 billion, underscoring robust demand for Broadcom’s custom accelerators and networking products. AVGO Q3 Earnings Beat Estimates, Revenues Rise on Strong AI Demand
• Positive Sentiment: Long-term AI expectations improved: Broadcom raised its fiscal 2027 AI semiconductor revenue outlook to approximately $115 billion and projected $230 billion in fiscal 2028. Analysts and investors view customers such as Alphabet, Anthropic and OpenAI as potential sources of substantial future demand. Several firms maintained or raised bullish price targets, including Truist, KeyBanc, Cantor Fitzgerald and Macquarie. The Path to $230 Billion: Broadcom Outlines the Next Phase of Its AI Growth Story
• Neutral Sentiment: Supply constraints are limiting reported growth: Management indicated that demand for AI infrastructure may be significantly higher than current shipments, but land, power, chips and substrates are delaying data-center deployments. This supports future demand but may constrain near-term revenue recognition and margins. Broadcom CEO Discusses AI Demand and Data-Center Constraints
• Negative Sentiment: Fourth-quarter guidance missed expectations: Broadcom forecast approximately $34.8 billion in fiscal fourth-quarter revenue, below Wall Street’s roughly $35.0 billion estimate. The modest outlook, combined with concerns about customer concentration, competition from Marvell and potential margin pressure, overshadowed the earnings beat. High expectations and a premium valuation amplified the sell-the-news reaction. Broadcom Forecasts Quarterly Revenue Below Estimates

Broadcom Company 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.

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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